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Celsius Holdings Inc CELH

Morningstar Rating
$79.27 −2.35 (2.88%)
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Company Report

Celsius Earnings: Distribution Gains and Strategic Brand Investment Drive Strong Performance

No-moat Celsius’ shares surged around 20% after reporting fourth-quarter sales of $347 million (up 95%) and $0.17 in earnings per share (up 242%) that topped FactSet consensus by 4.8% and 8%, respectively, with a milder outperformance than in the first three quarters of the year. However, 2023 sales of $1.3 billion and a 20.2% operating margin largely matched our estimates. We think the market’s reaction reflects the firm’s progress in core initiatives such as expanding distribution points, new product launches, and market share gains. However, our take is more tepid. We expect to raise our $33 fair value estimate by a mid-single-digit percentage to account for slightly greater revenue growth and the time value benefit, partially offset by higher-than-anticipated advertising spending, but shares remain richly valued. While we remain sanguine about Celsius’ health-centric offerings and PepsiCo’s distribution strides, we caution investors on the challenge of gaining market share from dominant players like narrow-moat Monster and Red Bull, especially as rivals intensify innovation and pricing competition over time.

Price vs Fair Value

CELH is trading at a 140% premium.
Price
$79.27
Fair Value
$67.00
Uncertainty
Very High
1-Star Price
$84.89
5-Star Price
$19.20
Economic Moat
Hxqr
Capital Allocation
Scnjygbx

Bulls Say, Bears Say

Bulls

Celsius’ better-for-you, fitness-oriented product portfolio compliments consumers’ preference for wellness-oriented offerings, propelling outsize growth prospects relative to the overall beverage and energy drink category.

Bears

Due to the category’s capacity for innovation, Celsius must deploy higher levels of marketing and R&D spending to remain competitive, signaling the significant brand investment required to stay relevant, which could cap the firm’s profit prospects.

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News

Trading Information

Previous Close Price
$81.62
Day Range
$76.8585.56
52-Week Range
$26.7585.56
Bid/Ask
$79.00 / $79.29
Market Cap
$18.37 Bil
Volume/Avg
15.4 Mil / 5.0 Mil

Key Statistics

Price/Earnings (Normalized)
100.44
Price/Sales
14.25
Dividend Yield (Trailing)
Dividend Yield (Forward)
Total Yield

Company Profile

Celsius Holdings plays in the energy drink subsegment of the global nonalcoholic beverage market, with 94% of revenue concentrated in North America. Celsius’ products contain natural ingredients and a metabolism-enhancing formulation, appealing to fitness and active lifestyle enthusiasts. The firm’s portfolio includes its namesake Celsius Originals beverages (including those that are naturally caffeinated with stevia) and Celsius On-the-Go powder packets. Celsius focuses its time on branding and innovation, while it utilizes third parties for the manufacturing, packaging, and distribution of its products. In 2022, Celsius forged a 20-year distribution agreement with PepsiCo, which holds an 8.5% stake in the business.
Sector
Consumer Defensive
Industry
Beverages - Non-Alcoholic
Stock Style Box
Mid Growth
Total Number of Employees
378

Competitors

Valuation

Metric
CELH
MNST
KO
Price/Earnings (Normalized)
100.4437.6822.13
Price/Book Value
69.597.449.89
Price/Sales
14.258.715.65
Price/Cash Flow
80.2034.9920.76
Price/Earnings
CELH
MNST
KO

Financial Strength

Metric
CELH
MNST
KO
Quick Ratio
3.413.830.72
Current Ratio
4.364.811.13
Interest Coverage
8.89
Quick Ratio
CELH
MNST
KO

Profitability

Metric
CELH
MNST
KO
Return on Assets (Normalized)
17.47%18.93%12.05%
Return on Equity (Normalized)
167.51%22.41%45.69%
Return on Invested Capital (Normalized)
23.02%21.07%17.60%
Return on Assets
CELH
MNST
KO
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Name
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Economic Moat
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KO
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PEP
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MNST
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KDP
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