Celsius Holdings (NASDAQ:CELH) stock has experienced tremendous growth over the past few years, driven by the increasing popularity of its energy drinks.
However, recent months have been difficult for the stock, with shares of Celsius falling sharply of late and the stock is now well into oversold territory with a Relative Strength Index (RSI) of just 24.
When the RSI falls below 30, that’s an indication a stock has seen a lot of selling pressure. At 24, the significant is even more significant for Celsius. For investors, it could, however, make Celsius an intriguing buy given its reduced price. But there are risks to consider.
The big one is that the company’s impressive growth has slowed. While its revenue surged over the years from $314 million in 2021 to more than $1.3 billion this past year, the pace is moderating. Celsius still posted a 23% year-over-year revenue increase in its most recent quarter, but this is a significant drop from the triple-digit growth rates that once attracted investors.
Celsius has also faced distribution challenges with its primary partner, PepsiCo (NASDAQ:PEP). Celsius management recently revealed that PepsiCo has ordered $100 million less product in the current quarter than last year. This news triggered a further decline in the stock as investors worry that its growth rate will plummet even further.
Shares of Celsius are now down more than 60% in just the past six months. At 31 times trailing earnings, it could make for a good buy but investors should tread carefully as the sell-off may not be over just yet.