Current Developments Surrounding CELH Stock
Refreshed Article:
Celsius (CELH) experienced an impressive 20% surge last week, driven by a new distribution agreement with Suntory Beverage & Food Benelux, opening doors to Belgium and Luxembourg. Additionally, just-released retail sales figures demonstrate a slight 0.2% increase, a recovery from a revised 1.2% decline in the previous month. The uptick, however, fell short of the 0.6% growth projection. With CELH trading around $33, the stock seems enticing yet volatile - offering a tricky choice for investors.
CELH - A Valuable Yet Volatile Pick
Our analysis reveals that CELH stock, notably expensive compared to the broader market, boasts a price-to-sales (P/S) ratio of 5.8, significantly higher than the 3.2 for the S&P 500. Similarly, the company's price-to-operating income (P/EBIT) ratio is 50.5, contrasting favourably against the benchmark's 24.3. The price-to-earnings (P/E) ratio stands at an impressive 73.1 compared to 24.3 for the S&P 500.
Sales Growth Over Recent Years
Celsius has enjoyed substantial sales growth in recent years, though this expansion has slowed down slightly. Over the past three years, its top line expanded at an average rate of 71%, contrasted by a 6.3% rise for the S&P 500. Celsius' revenues surged from $1.3 billion to $1.4 billion in the past 12 months, registering a growth of 2.9% compared to the growth of 5.2% for the S&P 500. However, the company's quarterly revenues declined 4% in the most recent quarter, from $347 million a year ago, in contrast to 5.0% improvement for the S&P 500.
Profitability
Celsius' profit margins hover around the median level for firms in the Trefis coverage universe. The company's Operating Income for the last four quarters amounted to $156 million, equating to a moderate Operating Margin of 11.5%. Over the same period, its Operating Cash Flow (OCF) was $263 million, pointing to a moderate OCF-to-Sales Ratio of 19.4%.
Financial Stability
Celsius' balance sheet shines with strength. Its Debt figure stood at $20.3 million at the end of the most recent quarter, while its market capitalization is an impressive $7.7 billion (as of 3/21/2025). This translates to a strong Debt-to-Equity Ratio of 0.3% (compared to 19.0% for the S&P 500), with lower ratios being favourable. Moreover, cash (including cash equivalents) equaled $890 million of the $1.8 billion in Total Assets for Celsius, yielding a robust Cash-to-Assets Ratio of 49% (versus 14.8% for the S&P 500).
Downturn Resilience
CELH stock's performance during various downturns revealed that it has fared worse than the benchmark S&P 500 index. Despite hope for a mild landing for the U.S. economy, potential repercussions during another recession remain unpredictable. Explore our dashboard How Low Can Stocks Go During A Market Crash? for a deeper understanding of CELH's performance during and after recent market crashes.
2022 Inflation Shock
- CELH stock plummeted 46.1% from a high of $25.03 on 3 January 2022 to $13.50 on 27 January 2022, compared to a peak-to-trough decline of 25.4% for the S&P 500.
- The stock recovered to its pre-Crisis peak by 6 July 2022 and since then, it climbed to a high of $96.11 on 13 March 2024 and currently trades around $30.
2020 Covid Pandemic
- CELH stock fell 51.5% from a high of $2.21 on 4 March 2020 to $1.07 on 16 March 2020, compared to a peak-to-trough decline of 33.9% for the S&P 500.
- The stock fully recovered to its pre-Crisis peak by 18 May 2020.
The Bottom Line
In summary, Celsius' performance across factors such as Growth, Profitability, Financial Stability, and Downturn Resilience indicates a very strong overall standing. Despite high valuations, the premium is justified by the company's stellar sales and earnings growth in recent years. Celsius has established itself as a major competitor within the energy drink market, with partnerships like PepsiCo offering crucial advantages. Despite the stock's attractive prospects, its high valuation and volatility warrant approach with caution. Looking for a stable yet profitable investment alternative? Our High Quality (HQ) Portfolio offers balanced returns comfortably outperforming the S&P 500 since inception.
Further Insights:- Since 2024, Celsius has grappled with challenges like adjustments by its major distributor, PepsiCo, which impacted sales. However, a notable surge in CELH stock posted a recovery phase as of March 2025.- Over the long term, CELH stock has exhibited more volatility and growth potential compared to the S&P 500, contributing to its attractions and risks.
- The recent increase in CELH's valuation can be attributed to its new distribution agreement with Suntory Beverage & Food Benelux, expanding into Belgium and Luxembourg, and despite the mild recovery in retail spending, it only met a projected growth of 0.6%.
- In the energy drink market, Celsius has established partnerships with notable brands like Pepsi, Monster, and Red Bull, contributing to its sales growth in recent years, though it has slowed down slightly.
- Despite the impact of potential recessions on the U.S. economy, CELH stock's performance during previous downturns has been less resilient compared to the S&P 500, indicating that investors may need to exercise caution when considering CELH as an investment.
