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Proprietary Data Insights Financial Pros’ Top Beverage Stock Searches in the Last Month
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40% Down but Not Out: Is Celsius (CELH) Poised for a Comeback?
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Monster Energy (MNST) delivered over 20,000% return in the past two decades, one of the best performances in the S&P 500. Now, there’s a new kid on the block grabbing everyone’s attention – Celsius (CELH). Celsius’ stock has climbed almost 20,000% in the past decade and a whopping 2,800% in the past five years. Understandably, it’s the top non-alcoholic beverage stock searched by financial pros in the past month. Yet, the stock’s recent performance has been anything but magnificent. Shares are down almost 40% year-to-date despite revenues doubling nearly every year. Does that make this growth dog a potential rebound stock, or is this a sign of maturation? Celsius’ Business Celsius Holdings is on fire, revolutionizing the energy drink scene with its health-focused, fat-burning beverages. This Boca Raton-based disruptor has muscled its way into a crowded market, offering a jolt of energy without the junk. From convenience stores to gym fridges, Celsius’ lineup of drinks and powders is charging up consumers across the U.S. and beyond. Their secret weapon? A clinically proven formula that claims to torch calories and energize without artificial nasties or the dreaded sugar crash. Celsius breaks down its energetic empire into:
Q2 2024 saw Celsius smash records, with revenue surging 23% to a cool $402 million. They’re not just growing; they’re dominating, fueling nearly half of all category growth and capturing 11% of the U.S. energy drink market. Celsius isn’t content with conquering just one continent. In 2024, they’ve stormed into the UK, Ireland, and Canada, with Australia, New Zealand, and France next on the hit list. It’s a global energy rush, and Celsius is leading the charge. Innovation keeps this brand buzzing. New flavors, expanded product lines, and the launch of CELSIUS Essentials prove they’re not resting on their laurels. By teaming up with fitness gurus and athletes, Celsius is positioning itself as the go-to drink for the sweat-and-selfie generation. Financials
Source: Stock Analysis Celsius has delivered stunning sales growth year after year. More importantly, the company improved its gross margins by 10% from 2021 to 2024. Profit margins are now over 16%, as are free cash flow margins. The company holds nearly $1 billion in cash on its balance sheet and no debt. At the moment, Celsius doesn’t pay a dividend nor does it repurchase shares. Valuation
Source: Seeking Alpha Despite its incredible growth profile, Celsius isn’t that expensive relative to its peers. At 33x trailing earnings, it is slightly more expensive than Monster Energy (MNST) and Coca-Cola (KO). The same is true for its price-to-cash flow, which is comparable to Keurig Dr Pepper (KDP). Growth
Source: Seeking Alpha Yet, no other paper on this list matches Celsius’ sales growth. Revenues are decelerating and are expected to climb just under 40% this year. However that’s still more than 4x any of its peers. Profitability
Source: Seeking Alpha Celsius’ gross and net income margins now rival its peers. While free cash flow margins aren’t the best, we expect those to improve as the company matures.
Our Opinion 10/10 For a long while, Celsius’ valuation didn’t make sense. Now it does. Shares can certainly fall further from here. But they could just as easily bounce. We don’t expect sales to keep at the same rate they once did. Nonetheless, this is a cheap growth play with a lot of potential. |
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