Opinions
Stockchase Insights
Celsius Holdings
CELH-Q
BUY ON WEAKNESS
Feb 21, 2025
Stock price when the opinion was issued
You might be interested:
Celsius is a proven fitness drink backed by multiple university studies. celsius accelerates metabolism, burns body fat & calories and provides healthy energy. celsius product attributes · no sugar · no preservatives · no high fructose corn syrup · no artificial colors · no artificial flavors · 100% of 7 essential vitamins · gluten-free · kosher certified winner of 15 international awards for great taste and innovation, celsius is available in seven delicious flavors, carbonated and non carbonated, and also in powder stick packets that can be mixed with water. Social media mentions are up 118% in the past 24h.
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.
Unlock Premium - Try 5i Free
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.
Unlock Premium - Try 5i Free