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Celsius Holdings Inc CELH

Morningstar Rating
$64.13 +2.94 (4.80%)
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Company Report

Celsius Set to Seize Near-Term Energy Drink Demand, Despite Lacking a Competitive Edge

Celsius has amassed impressive volume share gains in the North American functional and reduced sugar energy drink category in recent years and is poised to surpass over $1 billion in sales in 2023 from just $75 million in 2019. Propelling the momentum, we surmise Celsius’ better-for-you product portfolio and active-lifestyle branding strategically caters to consumers' penchant for healthier alternatives, while a 2022 distribution agreement with wide-moat PepsiCo has bolstered its channel reach and ability to secure shelf space. That said, we remain skeptical that Celsius benefits from any durable competitive advantage based on brand intangibles or cost advantages, given intense competition from resource-rich incumbents with strong brands, such as Monster and Red Bull, and smaller entrants’ propensity to deliver innovation.

Price vs Fair Value

CELH is trading at a 94% premium.
Price
$64.13
Fair Value
$88.00
Uncertainty
Very High
1-Star Price
$83.45
5-Star Price
$11.40
Economic Moat
Mpk
Capital Allocation
Lytylch

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
$61.19
Day Range
$62.1764.89
52-Week Range
$26.7568.95
Bid/Ask
$63.81 / $64.25
Market Cap
$14.86 Bil
Volume/Avg
381 / 4.3 Mil

Key Statistics

Price/Earnings (Normalized)
98.55
Price/Sales
12.77
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)
98.5538.1422.37
Price/Book Value
67.937.389.84
Price/Sales
12.778.555.62
Price/Cash Flow
80.8135.1320.67
Price/Earnings
CELH
MNST
KO

Financial Strength

Metric
CELH
MNST
KO
Quick Ratio
2.923.600.72
Current Ratio
3.624.511.13
Interest Coverage
8.89
Quick Ratio
CELH
MNST
KO

Profitability

Metric
CELH
MNST
KO
Return on Assets (Normalized)
12.73%18.46%12.05%
Return on Equity (Normalized)
164.59%21.94%45.69%
Return on Invested Capital (Normalized)
16.71%21.63%17.60%
Return on Assets
CELH
MNST
KO
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Economic Moat
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KO
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MNST
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KDP
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