We came across a bullish thesis on Celsius Holdings, Inc. (CELH) on Make Money, Make Time’s Substack by Oliver | MMMT Wealth. In this article we will summarize the bulls’ thesis on CELH. CELH Technologies, Inc. shares were trading at $33.18 as of Sept 16th.
A shelf filled with a variety of bottles of energy drinks, juices, and sodas in a convenience store.
Celsius Holdings (CELH) presents a compelling investment opportunity despite its recent stock price decline to $33.50, down from a 52-week high of $96.11. The company, headquartered in Boca Raton, Florida, boasts a market cap of $8.54 billion and has faced a significant drop in stock value, attributed primarily to revenue growth contraction and broader market challenges in the energy drink sector. Despite these headwinds, CELH’s performance remains robust, particularly in online sales and international markets, positioning it well for future growth.
CELH has experienced a reduction in revenue growth rates from triple-digit figures, which has affected investor sentiment. However, this slowdown should not overshadow the company’s continued market strength. CELH’s online dominance is notable, with a 22.1% share on Amazon, surpassing competitors such as Monster and Red Bull. This strong performance indicates a loyal customer base and significant market presence, especially in e-commerce.
In the U.S. multi-outlet convenience store segment, CELH has shown a solid 36.5% growth this year. While this growth is promising, it is also potentially understated due to delays in store resets and promotional activities. Despite the broader energy drink market’s slower growth, CELH’s contribution to category expansion is evident. Management emphasizes that their focus is on driving category growth and attracting new consumers rather than directly competing for market share with established players like Red Bull and Monster.
Internationally, CELH’s revenue is currently modest at $20 million but is growing at a strong 30% year-over-year. Notable progress has been made in Canada, with promising prospects in the UK, Ireland, Australia, and France. The company’s international strategy and expansion into new markets are poised to enhance revenue growth over the long term.
Looking ahead, CELH has plans to diversify its product offerings, including potential entries into water and food products like protein bars by 2025. These new product lines and international expansion present significant growth opportunities. While revenue growth rates may stabilize around 20% in the near term, CELH is expected to experience strong growth over a five-year horizon. The current stock price, given the company’s growth potential and strategic initiatives, represents an attractive entry point for investors.
Celsius Holdings, Inc. is also not on our list of the 31 Most Popular Stocks Among Hedge Funds. As per our database, 27 hedge fund portfolios held CELH at the end of the second quarter which was 34 in the previous quarter. While we acknowledge the risk and potential of CELH as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than CELH but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.
