Celsius Holdings, Inc. (NASDAQ: CELH)
Trending stock of the day.
Celsius Holdings, Inc. was founded in April 2004. It is a global company with a proprietary, clinically-proven formula for the flagship brand CELSIUS. The company develops, processes, markets, distributes and sells functional drinks and liquid supplements in the United States and internationally. The company offers various carbonated and non-carbonated functional energy drinks under the CELSIUS Originals name. Having recently hit a new record high this week, the company has seen an increase in mentions by a massive 282% over the last day, prompting investors to wonder whether they should take a deeper look into the company now. Currently, shares of Celsius Holdings trade at $131.56.
Positive Hype
Having recently posted stellar Q1 results, Celsius has a lot going for them now. Here are some of the reasons the company has generated positive hype.
The company behind the sparkling energy drinks that help improve a body's metabolism to burn more calories saw its revenue skyrocket 95% to $290 million through the first three months of this year (while analysts were expecting only 64%).
Stateside revenue more than doubled, doubling its share of the country's energy drink market to 7.5%.
Celsius also disclosed during its Q1 conference call, that its volume from grocers and convenience stores grew a record 95.4% during the three months in question, accelerating from a growth pace of 69.5% in the comparable quarter a year earlier.
Turning to profitability, Celsius' gross margin jumped to 43.8% compared to 40.4% in the same quarter of 2022.
On the bottom line, Celsius had a net income of $34.4 million, up from just $6.7 million in the prior-year period.
There's optimism for Celsius to duplicate its success overseas now that beverage giant PepsiCo is on board as both a distribution partner and an investor. PepsiCo invested $550 million for an 8.5% stake in Celsius last summer as well.
The $0.40 a share in net income was twice as much as what Wall Street pros were modelling.
Negative Hype
The road for Celsius is not without hurdles, here is one of the setbacks Celsius faced that might be of concern to investors.
Celsius has had to overcome some headwinds recently. Two separate, high-profile lawsuits were settled earlier this year, out of which they lost one.
Conclusion
The stock's up more than 50% over the course of just the past month, with a huge piece of that gain taking shape in just one day following last week's release of its first-quarter results. However, the runway is still long for Celsius to deliver years of growth that is several times the pace of the historically sleepy beverage stocks market. Thanks to the recent run-up, the stock's now priced at 100 times this year's expected per-share profits, and more than 60 times next year's expected bottom line. Shareholders that make purchases now will most likely be paying a premium, but that’s the price for growth. Nonetheless, Celsius should be on your radar.
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