CELH stock forecast: is it safe to buy the Celsius Holdings dip?

By:
on Mar 28, 2024
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  • Celsius Holdings share price has pulled back recently.
  • There are concerns about the company’s hefty valuation.
  • The company is seeing strong US and international growth.

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Celsius Holdings (NASDAQ: CELH) stock price is having another strong year as it continues to outperform the Nasdaq 100 and S&P 500 indices. The stock is up by 53% this year and by over 170% in the past 12 months. It has also outperformed other beverage stocks like Monster Beverage, Coca-Cola, and Pepsi.

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Growth has continued

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Celsius Holdings has been the best-performing beverage company as demand for its energy drinks jumped. Its quarterly and annual revenues have all surged following its partnership with PepsiCo, the second-biggest beverage company in the world.

Celsius Holdings generated over $1.38 billion in annual revenues in 2023, up sharply from $653 million in the previous year. It also became more profitable as the net profit surged to more than $226 million.

Its last financial results showed that the company was growing at one of the fastest pace in the industry. Its quarterly revenue rose by 95% to $347 million as it grew its market share to 11.5% in the United States.

Analysts believe that the company has more room to grow in 2023 because of its international division. Most recently, Celsius Holdings announced that it would expand its business in Australia and New Zealand. 

A good example of this is Monster Beverage, which has used its partnership with Coca-Cola to have a major market share internationally. In its recent 10k report, Monster said that its total revenue jumped to $7.14 billion in 2023. Of this, $2.53 billion came from its international business.

The company also recently amended its partnership with PepsiCo. This deal is intended to boost the payments to PepsiCo depending on sales. As such, Pepsi will have an incentive to increase its Celsius sales.

A key concern among investors is its valuation. Celsius now has a market valuation of over $21 billion, thanks to its recent gains. This means that it is trading at a price-to-sales ratio of 16.15, which is substantial. 

Investors justify this by its strong growth in the coming years. The expectation is that the company’s revenue will grow to $1.8 billion in 2024 and hit $2.48 billion in 2025. This means that it is trading at 8.48x 2026 sales, which is not cheap.

Celsius Holdings stock

Celsius Holdings estimates

Celsius Holdings stock price forecast

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CELH stock

CELH chart by TradingView

The daily chart shows that the CELH share price has been in a strong bullish trend in 2024, peaking at $99.48 last week. It has pulled back sharply to the current $84. In most periods, assets tend to drop before hitting a key psychological point like $100. 

Celsius Holdings’ stock price remains above all moving averages. Oscillators like the Relative Strength Index (RSI) and the Stochastic Oscillator have all pointed downwards. It has also formed a small head and shoulders pattern.

Therefore, the stock will likely retreat in the coming days as bulls target the 50-day moving average at $75 and then rebound ahead of earnings. 

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