CELH stock is the IBD Stock Of The Day as the energy drink maker eyes an early entry and the health and fitness market heats up.
Celsius Holdings sports triple-digit earnings and revenue gains. Growth is slowing, though still at impressive levels.
In the third quarter, Celsius doubled sales on Amazon. It also has a PepsiCo distribution deal, while it is on a store expansion spree of its own.
On the back of scorching growth, CELH stock earns a spot on the IBD 50 list of top growth stocks.
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Celsius Holdings Ratings
The Stock Checkup tool shows that CELH stock earns a solid 82 IBD Composite Rating, out of a best-possible 99. It has a near-perfect RS Rating of 98. Its EPS Rating is an underwhelming 25.
That reflects a deep loss in its latest quarter, due to a one-time charge as the company terminates distribution arrangements as it transitions to PepsiCo's distribution system in the fourth quarter. Celsius replaces the Bang brand drinks as the "exclusive healthy functional energy drink" in the PepsiCo portfolio for 24 months, Celsius executives said in an August investors call.
CELH stock carries an average rating of buy from five analysts, FactSet shows.
Wall Street analysts think it may not be long before Celsius disrupts the longtime energy drink duopoly between Red Bull and Monster Beverage.
CELH Stock
Shares of Celsius rose 1.5% to 107.88 on the stock market today, poking back above its 21-day line. The move provides a potential early entry, but Wednesday's gain came in volume too low to qualify as a breakout.
An early December breakout past a cup-base buy point at 118.29 failed. But a new handle has formed, presenting a traditional buy point at 122.34.
The relative strength line for CELH stock has rallied to a record high in 2022, the MarketSmith chart shows. A rising RS line means that a stock is outperforming vs. the S&P 500.
A 98 Relative Strength Rating means that CELH stock has outperformed 98% of all stocks in IBD's database over the past year.
Monster bears an RS Rating of 92 and PepsiCo has an 88.
In August, PepsiCo announced a $550 million investment in Celsius as part of a long-term distribution deal. Earlier in 2020, Pepsi acquired Rockstar Energy for $3.85 billion.
Energy drinks are one of the fastest growing beverage segments outside of alcohol.
Celsius Earnings Strong But Volatile
Over the past three quarters, Celsius earnings growth went from 800% to 140% to the third quarter's drop into a loss, FactSet shows. Revenue surged between 98% and 167% over the same period.
In the latest September-ended quarter, Celsius lost $2.46 per share vs. expectations for EPS of 10 cents. Results were hurt by a $155.4 million sales-and-marketing expense, a Q3 earnings release said.
Analysts forecast Celsius earnings will rebound to $1.11 in fiscal 2023 from a loss of $2.42 in 2022 (which includes the third quarter's $2.46 per share loss).
Revenue gains are seen slowing from 107% in 2022 to a still-mighty 50% in 2023.
CELH stock is up more than 38% from an early November low, with a year-to-date gain of 46%.
