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Celsius Holdings
CELS-Q
HOLD
Jun 26, 2024
N/A
Stock price when the opinion was issued
breweries
beverages
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COMMENT
An energy drink-maker that rallied nearly 1000% in 2020, but 2020's winners are now selling OFF. Their last quarter reported was generally solid with earnings a penny weaker than expected. It was then punished by 25%, though bounced 8% today. An aluminum can shortage will pressure gross margins, but the bigger problem was the stock coming in way too hot coming into this quarter. Buying opportunity?
breweries
beverages
HOLD
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research
We still like CELH but the negative momentum is very concerning. It has now been nearly cut in half on 'slowing growth', but these are all opinions and the company has not indicated such, at least to any material degree. We would be reluctant to sell now after brokers downgrade after it has already fallen. This may be a case where fear is worse than reality, but the stock decline as noted is not encouraging and we would certainly be reluctant to add.
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breweries
beverages
The broader energy drink market is seeing a slowdown and while Celsius is still growing the top and bottom lines in the 30% range, investors are worried about the slowdown in growth more broadly. A higher valuation also adds to volatility. Pepsi was also going through some inventory adjustments over the last few months that led to a bit of a speedbump for the company. The space in general is out of favour currently but we don't think the longer-term outlook and potential has changed a whole lot here.
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