Celsius Holdings (CELH)

Energy drinks. PEP owns 11%. Growth underappreciated by markets. Growing at same levels as MNST, more cheaply, and with a more diversified set of brands that are growing faster than MNST's. 

Drawdown due to fears of previous hiccup repeating itself for transitioning inventory to new brands; management says we've got this. No dividend.

The company is doing well and closed an acquisition. The stock could rise $10.

He was surprised by their bad earnings miss (shares have recently dropped) and didn't understand it. Not good. Have to wait another quarter.

Is up 76% this year after a choppy 2024. Troubles began last year when owner Pepsico ordered fewer energy drinks from them. CELH shares had risen on the Pepsi partnership prior to that. Since the February bottom, shares have been up 120%. In Feb. they delivered excellent numbers and acquired Alani Nu, which boasted +15% adjusted EBITDA  margin and $605 million in net sales in 2024. CELH expects strong synergies between the two brands. CELH Q1 gross margin was +52.3% and +41% in international sales. Shares are pricey at 57x PE, but is historically 89x. Comps are improving and the acquisition is good.

They had a solid top and bottom line beat last week, and announced they were buying another sugar-free drink company. Shares jumped.

EPS of 14c beat estimates of 11c; revenue of $332M beat estimates of $325M. EBITDA of $62.9M crushed estimates of $42M. Revenue did fall 4.4%. International revenue was very strong, up 39%. Margins rose 2.4 points. It was a good quarter, and few were expecting much. The acquisition of Alani Nu makes sense. It is a big purchase, but it consolidates market share, adds more exposure to the women's market, and will be accretive in its first year. A mix of stock and cash, it should add to long term growth and strengthen CELH's overall position within the sector. The big move today will scare some of the short sellers (26%). We think the bottom has likely been seen now here with the stock and it will likely work its way up higher over time. We would be less inclinded to chase this in today's frenzy, however. 
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At some point, CELH is going to become a very very attractive buy. But right now it is a falling knife, having dropped from near $100 to today's $25, in a relentless rollover. It has cash and earnings growth, but we would not yet consider it 'value' since it is still at a 37X earnings valuation. The product is good, we think, but Pepsi's de-stocking has been brutal to the company, and revenue fell 31% in the Q3. We need this to at least level out to get some confidence back. 
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He bought it because of the CEO change and shareholder activism. This is a bottom-fishing, contrarian play.

Their relationship with Pepsi isn't helping them. Shares once soared, but have fallen 63% in the last 6 months. Maybe the convenience stores are not selling as well. He doesn't trust it.

They just reported a record Q2, but the CEO announced somber comments about the energy drink industry. Shares are down 52% since May, but should be going higher.