Celsius Holdings Inc. (CELH) is an energy drink and liquid supplements developer based out of Florida. Valued at $14.5 billion by market cap, the company manufactures, processes, markets, distributes, and sells their CELSIUS-branded fitness drinks, aimed at improving metabolism and burning fat, in the U.S. and internationally. Formerly known as Vector Ventures Inc., it changed its name to Celsius Holdings back in 2007.
The growth stock has won over quite a few fans on Wall Street for its outsized returns in recent years, which are on par with the multibagger gains delivered by artificial intelligence (AI) stocks like Nvidia (NVDA). However, CELH has undergone a steep pullback recently, and is down 37% from its mid-March highs.
On a YTD basis, the stock still maintains a lead of 14.6%, which is right in line with the broader S&P 500 Index ($SPX).
Celsius Slides on Nielsen Stats
Celsius reported its Q1 results last month on May 7, with revenue of $355.7 million widely missing consensus estimates of $389.8 million. The annual revenue growth rate of 37% was considerably lower than usual for Celsius. Adjusted EBITDA of $88.0 million topped Wall Street's forecast, as did earnings per share (EPS) of $0.27. Gross margin improved to 51.2% on a year over year basis.
The bottom-line improvement came as the company reaps rewards from its inventory cuts and lower freight on raw materials. Longer-term, management aims to maintain a gross margin in the high 40s.
At the end of the quarter, the company had a cash balance of $879 million.
While CELH slipped a bit on the release of its Q1 results, it was a cautious note from Morgan Stanley (MS) regarding the latest Nielsen data on May 28 that sent the stock reeling nearly 13% in a single session. The stats showed that in the week ended May 18, Celsius held a market share of 10.5% - down from 10.8% previously.
Additionally, analyst Dara Mohsenian noted a sequential sales growth decline to 39% for the week, while pricing was down 7.2% year over year.
What Do Analysts Think About Celsius Stock?
More recent Nielsen data has been more encouraging for Celsius, and most analysts continue to favor the growth stock.
Specifically, Cowen analyst Robert Moskow expects the stats coming out in July to be a potential bullish catalyst for CELH, and Stifel recently upped its price target to $95 on expectations for Celsius to hold its market-share gains.
Overall, 12 out of the 14 analysts covering Celsius stock consider it a “Strong Buy,” with the remaining 2 calling it a “Hold."
The average price target for CELH stock is $89.38, indicating expected upside of 43% from Friday's close. Priced at 8.63x sales, the stock currently trades at a roughly 28% discount to its five-year average multiple.
On the date of publication, Ruchi Gupta did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
