Is Celsius Holdings (CELH) Fully Priced On Lower Earnings Estimates?
Celsius Holdings (CELH) just picked up a Zacks Rank #4 (Sell) after analysts trimmed earnings estimates, even as revenue projections increased, raising fresh questions about what investors are paying for this premium valued stock.
Recent trading has been choppy for Celsius Holdings, with the share price up 3.64% over the last day and 2.77% over the past week, yet still down 41.03% on a year to date share price basis and showing a 56.20% decline in total shareholder return over the past year as investors reassess what they are willing to pay for premium growth at a time when earnings expectations are being revised lower.
Compare Celsius Holdings with a curated group of premium growth stories and review how valuations stack up across 33 high quality undervalued stocks before deciding where to allocate fresh capital.
After a sharp reset in Celsius Holdings and a fresh hit to earnings expectations, the premium tag on the stock matters more than ever. Does the current price still compensate you for that gap between growth and profits?
Most Popular Narrative: 41% Undervalued
Celsius Holdings closed at $28.16 while the leading narrative on the stock pins fair value closer to the high $40s. This frames the current pullback as a valuation gap rather than a finished story.
I believe Celsius Holdings stock can reach a price of $47.00 per share (+42%) over the next two months, with potential to reach $71.00 per share within the next few years. This will be driven by continued earnings and revenue gains, international expansion, and the long-term integration of Alani Nu and Rockstar, which were both recent acquisitions.
See why 11 investors see Celsius Holdings as 41% undervalued.
Result: Fair Value of $47.37 (UNDERVALUED)
Still, legal uncertainty around Celsius Holdings and execution risk on the Pepsi distribution partnership could quickly flip sentiment if either issue starts to affect earnings.
Find out about the key risks to this Celsius Holdings narrative.
Another View: Celsius Holdings Through The P/E Lens
The narrative fair value of $47.37 suggests upside for Celsius Holdings, yet the current P/E of 109.1x is far above the global beverage average of 16.6x, the peer group at 34x, and even our own fair ratio of 28.7x. That gap points to meaningful valuation risk if sentiment cools, so how comfortable are you paying this kind of premium multiple for the story you are buying?
To see how this valuation gap looks through earnings based measures, including how far the current ratio sits from the fair ratio, See what the numbers say about this price — find out in our valuation breakdown.
Next Steps
Opinions are mixed on whether Celsius Holdings deserves this kind of premium or a wider discount after the recent reset. Consider your options while sentiment is still forming, and weigh both sides of the story by reviewing the 2 key rewards and 2 important warning signs.
Looking for more Celsius Holdings sized ideas?
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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