Acquisitions fuel market expansion, enabling companies to diversify their offerings and penetrate new demographics, and Celsius Holdings (CELH) just threw gas on the acquisition fire. The energy drink maker has sealed a deal to acquire Alani Nutrition for $1.8 billion. Alani Nu, a brand that has skyrocketed in popularity since its 2018 debut, brings a strong, female-focused customer base and a distribution footprint primed for expansion. Together, the two companies are expected to drive $2 billion in sales, opening new doors for market dominance.
For Celsius, this is a strategic leap forward. The energy drink market is on track to grow at a 10% CAGR through 2029, and Alani Nu’s audience gives Celsius an edge in a key demographic. Moreover, with its established 50/50 demographic appeal, Celsius now gains even greater traction among female consumers.
With CELH stock recently rebounding after strong Q4 earnings and the acquisition news but still hovering near 52-week lows, could this be a buy-the-dip chance for investors, or should they simply sit tight? Let’s take a closer look.
About Celsius Stock
Florida-headquartered Celsius Holdings (CELH) has built a strong reputation in the energy drink industry by prioritizing health-conscious formulations. With a market cap of $6 billion, the company has gained consumer loyalty by avoiding common additives like aspartame and high fructose corn syrup.
A key focus is its strong distribution partnerships, especially with PepsiCo (PEP), which ensures broad shelf presence and seamless distribution. The acquisition of Alani Nu further strengthens Celsius’ brand portfolio, expanding product categories and enhancing revenue potential.
Celsius stock has seen a dramatic shift, tumbling 67.4% over the past 52 weeks and plunging 74.3% from its March 2024 peak of $99.62 to a low of $21.10 this February. However, the momentum is shifting. Following an earnings beat and the Alani Nu acquisition, CELH surged 36% in after-hours trading on Feb. 20. Over the past month, it has rallied 14.5%, outperforming the broader S&P 500 Index ($SPX).
From a valuation standpoint, CELH trades at 27.1 times forward earnings and 4.45 times sales, significantly above sector medians of 18.23x and 1.17x. This premium valuation underscores the market’s belief in CELH’s long-term growth trajectory.
Celsius Surpasses Q4 Earnings
Celsius released its fourth-quarter 2024 earnings on Feb. 20, reporting a 4.4% year-over-year revenue decline to $332.2 million. Adjusted EPS dropped 17.6% annually to $0.14 but surpassed estimates of $0.11, reinforcing investor confidence.
The quarter was characterized by strategic initiatives, notably the $1.8 billion acquisition of Alani Nu. The transaction is expected to enhance earnings, generate $50 million in synergies over two years, and increase pro-forma adjusted EBITDA to an estimated $393 million.
Moreover, international expansion remains a key priority, with strategic partnerships like those with Suntory in the United Kingdom and Ireland helping to strengthen Celsius’ global footprint. These efforts are expected to diversify the company’s market presence and open up new growth opportunities beyond the domestic market.
Analysts tracking Celsius forecast a 25.9% year-over-year EPS decline to $0.20 for first quarter of 2025. However, full-year EPS are projected to grow 35.7% to $0.95, followed by another 16.8% climb to $1.11 in 2026, signaling long-term confidence in Celsius’ growth trajectory.
What Do Analysts Expect for Celsius Stock?
Analysts are optimistic about the Alani Nu acquisition, predicting that CELH stock is in for some big gains. Needham raised its price target to $40 from $38 while maintaining a “Buy” rating on CELH.
This revised target reflects a valuation approximately four times projected 2026 revenue, with analyst Gerald Pascarelli expressing optimism about the acquisition. Pascarelli has highlighted the acquisition’s attractive valuation and its anticipated positive impact on earnings.
Meanwhile, B. Riley Securities analyst Jeff Van Sinderen has raised the price forecast from $44 to $49, anticipating the acquisition’s closure in Q2 and an increase in Celsius’ market share from 11.8% to 16%.
Overall, CELH has a “Moderate Buy” consensus rating. Of the 18 analysts covering the stock, 12 rate it a “Strong Buy,” one suggests a “Moderate Buy,” four recommend a “Hold,” and one advises a “Moderate Sell.”
Meanwhile, with an average analyst price target of $42.29, the stock presents potential 62% upside, while the Street-high target of $87 suggests the stock could rally as much as 234%.
