Wednesday's IBD 50 Stocks To Watch pick, energy drink leader Celsius, soared more than 23% in afternoon trade after the company's record quarterly sales late Tuesday. CELH stock is breaking out today past its latest buy point.
Celsius touts itself as a healthier, functional energy brand. The Boca Raton, Fla.-based company makes caffeinated, sparkling beverages and pre- and post-workout supplements in a variety of flavors.
The company claims its drinks and powder supplements boost metabolism while burning fat and calories. The flagship Celsius portfolio drinks contain seven vitamins without sugar, high fructose corn syrup, or artificial colors or flavors. They also come in powder stick form to mix with water on-the-go. Filling out the portfolio is the Celsius Stevia line, which uses natural sugars and caffeine.
On Tuesday, Celsius reported better-than-expected Q1 earnings and sales. The company earned 40 cents per share, soaring 344% year over year. Celsius reported record first quarter revenue of $260 million, up 95% vs, the year-ago period.
"During the first quarter of 2023, Celsius delivered an all-time quarterly record revenue of $260 million in sales and over $34 million in net income, driven by expanded availability and increased consumer awareness. In addition, we continue to further transition into PepsiCo's best in class distribution system," commented CEO John Fieldly in the news release.
Fieldly continued "In the United States, Celsius is now the established No. 3 Energy Drink Brand in the category [behind Red Bull and Monster Beverage, being the key growth driver over the last 52-week period. Celsius' share in the Energy Drink Category per SPINS IRI Total Mulo+C, for the four weeks ending 3/26/23, totals 7.5% market share, doubling from the prior year period and demonstrating Celsius warrants increased distribution and availability. Looking ahead, we have plans in place and initiatives underway to further leverage our expanding distribution and continue to build our global brand equity."
Celsius Stock Boasts Strong IBD Ratings
Since the energy drink leader was unprofitable in 2022, Celsius stock has a weak 39 out of 99 Earnings Per Share Rating, according to IBD Stock Checkup. This metric takes into account growth and stability of earnings over the past three years, with the two most recent quarters weighed more heavily.
Despite a spotty long-term earnings track record, Celsius boasts big revenue growth over the last few years. Sales soared 138% in 2021, followed by another 110% jump in 2022. Over the last three quarters, Celsius revenues grew an average 88%.
Looking forward, Celsius is on track for big profits in 2023, set to earn $1.05 per share according to FactSet estimates. Annual earnings are set to grow another 66% in 2024.
Finally, CELH stock shows a solid and improving 90 out of 99 IBD Composite Rating.
Celsius Stock Breaks Out
Celsius stock soared more than 23% midday Wednesday, breaking out past a cup base's 122.34 buy point, according to IBD MarketSmith. The 5% buy zone goes up to 128.46. Keep in mind the stock market uptrend is under pressure, so the breakout carries additional risk.
Bullishly, the stock's relative strength line hit a new high, confirming the energy drink maker as a market leader. The RS line measures a stock's price performance vs. the S&P 500.
Best Stocks To Buy And Watch
These are three recent IBD 50 Stocks To Watch picks.
| Company | Symbol | Buy point | Type of base |
|---|---|---|---|
| Royal Caribbean | 76.40 | Cup base | |
| Hyatt | 118.02 | Cup with handle | |
| Uber Technologies | 37.68 | Cup base |
Source: IBD Data As Of May 10, 2023
Follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on the best stocks to buy and watch and the stock market.
