Coca-Cola (KO -0.19%) has been a staple of many portfolios for decades. Warren Buffett loves the stock, and it's understandable, considering how long he has owned it. Shares of the beverage behemoth have gained 4,670% since 1984, and the company has a long track record of increasing its dividend consistently.

I can't believe I'm clashing with the mindset of my idol, but I don't see the potential in Coca-Cola that once was, which could lead to a slow 2025 performance.

Slow growth

Through the last three years, revenue growth has been slowing for Coca-Cola, dropping from 17.3% in 2021 (a big number largely due to the bounce back from COVID in 2020) to just under 7% revenue growth in 2023.

In its most recent quarter, the company actually reported revenue declines of 1%. Operating margins were weaker at 21.2%, compared to 27.4% a year ago, and earnings per share declined 7% to $0.66.

From a broader perspective, things do look a little better. Through the first nine months of the year, revenue is still up 2% to $35.5 billion, but operating income is down a tough 19%, with net income off by 3%.

A mix of less-desirable drinks

According to IBIS World, growth for soft drinks has actually seen an annualized decline of 0.5% between 2019 and 2024. Despite a broad portfolio of offerings, Coca-Cola is naturally very dependent on soda sales, which don't appear to have the best growth rates. This stands to make things more difficult for Coca-Cola. In fact, global unit case volume declined 1% in the most recent quarter.

The pressures of these challenges for Coca-Cola are prevalent in the stock price performance. Over the last five years, Coca-Cola shares have underperformed the S&P 500 by over 71%. For most investors, it's clear these days that one of the best approaches is to simply be invested in the S&P 500. Owning a sluggish stock like Coca-Cola just doesn't make a ton of sense when you consider the growth of the broader market.

Not now

Analyst estimates for 2025 are calling for earnings of $2.98 per share. That would give the stock a forward price-to-earnings ratio of 21.5. The five-year average has been 26.5, according to Ycharts.

I think this slight discount in valuation relative to the average is justified, given that the larger macro environment for soda seems pretty weak. As Fool.com writer Will Healy pointed out, Coca-Cola has relied somewhat on price increases to drive the bottom line. It certainly isn't the first company to do this, and it won't be the last, but it's not usually a sustainable strategy over the long term!

In a time when you can invest in stocks that have momentum like Nvidia or Microsoft, or within consumer stocks, something like Chipotle Mexican Grill, it's hard to justify Coca-Cola right now. At the end of the day, this is still a company to revere, but not necessarily one to add to one's portfolio.

Those who bought into Coca-Cola back in the day have seen a remarkable rate of annual increases in dividends. Today, you're looking at less than a 3% yield, and slowing revenue over the last three years. The stock has trailed the market, and there isn't much implying that things are going to change on that front.

Based on all of this, I rate Coca-Cola a sell for 2025. There just isn't enough here currently indicating that the new year will bring in major upside.