8. Celsius Holdings Inc. (NASDAQ:CELH)
Number of Hedge Fund Investors: 27
Jim Cramer commented that Celsius Holdings Inc. (NASDAQ:CELH) has been confusing to investors. He noted that while CEO John Fieldly presented a strong case for Celsius Holdings Inc. (NASDAQ:CELH) during an interview, the stock has continued to drop. Cramer doesn’t believe this decline necessarily signals major issues. Additionally, he pointed out that sales haven’t met expectations based on feedback from retailers and Amazon.com, Inc. (NASDAQ:AMZN), which may explain the downward pressure on Celsius Holdings Inc. (NASDAQ:CELH).
“Celsius has been a source of tremendous confusion. John Fieldly, the CEO, came on the show and told a terrific story, and yet all it does is go down, down, down. But that doesn’t necessarily mean something is wrong, although something is difficult to figure out between the relationship with PepsiCo, Inc. (NYSE:PEP) and Rockstar, and I think that may have a lot to do with the decline. But also, the sales have not been as good as we expected, from what we can tell from talking to clubs and, of course, Amazon.com, Inc. (NASDAQ:AMZN).”
Celsius Holdings Inc. (NASDAQ:CELH) is a strong investment option due to its impressive financial performance, growing market presence, and strategic positioning in the energy drink sector. In Q2 2024, Celsius Holdings Inc.(NASDAQ:CELH) reported a 23% increase in revenue to $402 million, driven by a 30% boost in international sales and a 32% rise in gross profit, which now accounts for 52% of revenue. Celsius Holdings Inc.(NASDAQ:CELH) also saw a 29% increase in non-GAAP adjusted EBITDA and a 55% rise in net income, reflecting its operational efficiency and strong profitability.
Despite facing intense competition, Celsius Holdings Inc. (NASDAQ:CELH) stands out in the energy drink market thanks to its expanding international footprint and innovative product offerings, including new flavors and product lines. Its partnership with PepsiCo, Inc. (NYSE:PEP) further broadens its market reach. Although the stock has a high P/E ratio of 43.49, its strong earnings growth and future sales potential suggest it may still be a good investment.
Alger Small Cap Growth Fund stated the following regarding Celsius Holdings, Inc. (NASDAQ:CELH) in its Q2 2024 investor letter:
“Celsius Holdings, Inc. (NASDAQ:CELH) engages in the development, marketing, sale, and distribution of functional drinks and liquid supplements. It also offers post-workout functional energy drinks and protein bars. During the quarter, shares detracted from performance after the company reported fiscal first quarter revenues below analyst estimates. The revenue shortfall was attributed to ongoing inventory management challenges with PepsiCo, which decelerated year-over-year revenue growth from over 100% to approximately 37%. Despite the near-term growth slowdown, we believe Celsius remains well positioned to potentially capture market share within the large energy and soft drink industry over the long-term.”
