If you haven’t heard of SodaStream International (NYSE: SODA), you probably will soon. The company’s slick countertop units inject carbon dioxide (CO2) into tap or filtered water, instantly transforming it into seltzer or a variety of sodas. In May, SodaStream units began selling at Wal-Mart, in addition to many other US retailers.

Do-it-yourself carbonation is not new; it was popularized in the 1970s and 1980s, especially in Europe. But it’s undergoing a resurgence, driven by the current emphasis on health and the environment.

Over the long term, SodaStream costs about as much as discounted soda or seltzer ($80 to $200 for the unit, $16 or so for a CO2 refill, and around $5 for the sodaflavor packets). But the result is a purer and more ecofriendly product. Users avoid typical soft drink manufacturer additives, including sodium and high fructose corn syrup, and the sodas have 25 percent fewer calories, mainly because SodaStream uses real sugar.

Just as important, consumers have way fewer bottles to lug around and throw away. To drive that point home, the company has launched a campaign stating that a single SodaStream unit can replace the 10,657 beverage containers the average US household throws away every five years.

Based in Israel, SodaStream went public in October 2010 for $20 a share. Although the company beat earnings estimates in each of the past six quarters, the market still regards home carbonation as a fad. As a result, the stock price is volatile. In the past year, SodaStream shares have traded from $80 down to $27, and have recently crossed $40 again. As the largest and highest profile company in its niche, with 10 million installed units worldwide, SodaStream’s strong growth is unlikely to fizzle out any time soon, so we expect more upside ahead.

North American revenue was up 93 percent for the first quarter of 2012 and now accounts for about 29 percent of total sales, with the bulk of sales (about 50 percent) still derived from Europe. In 2014, SodaStream hopes to distribute its products to US drugstore and supermarket outlets. And overseas, the company plans to expand into India and Greece next year.

The system’s use of soda flavors and refillable CO2 cylinders offers opportunities for recurring revenue. This repeat business produces 60 percent of revenue, and has higher profit margins than the carbonation unit itself. For the time being, SodaStream’s mechanisms for locking in above-market pricing for its CO2 replacement canisters are working: The company’s canisters have a proprietary valve designed to prevent refilling by third parties; only SodaStream canisters are compatible with its units; and SodaStream officially “lends” its canisters to consumers, limiting how they can be replenished through a “user license certificate.”

In addition, SodaStream is looking into creating carbonation units that can be pre-installed in refrigerators, and is likely to continue acquiring some of its independent distributors as well as smaller competitors.

The first-mover advantage is key because Soda- Stream’s major aeration patent expired in 2011. So the company relies mostly on its marketing/trademarks, ease of use, and design innovations to distinguish its product. For now, competition is fragmented and limited, including the “FlavorStation” by Primo Water and the “Whip-It Soda Siphon,” a pitcher to which small CO2 chargers can be added.

SodaStream’s forward price-to-earnings ratio was recently around 18, which is comparable to that of Coca-Cola (NYSE: KO) at 20 and PepsiCo (NYSE: PEP) at 18. But given SodaStream’s price-to-earningsgrowth ratio of 0.60 and strong growth potential, its shares trade at a discount.