4 reasons to buy Celsius Holdings (CELH) stock ahead of earnings

By:
on May 3, 2024
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  • Celsius Holdings share price has soared by over 11,000% from its lowest point in 2020.
  • The company is expected to report robust revenue and profit growth.
  • Monster Beverage, Coca-Cola, and Pepsi reported strong results.

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Celsius Holding’s (NASDAQ: CELH) stock price has lost its momentum recently. It has crashed from the year-to-date high of $99.50 to the current $74.40. Still, despite the pullback, it is one of the best-performing companies in Wall Street as it soared by over 11,000% from its lowest level in 2020.

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The case for Celsius Holdings

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There are several reasons why the Celsius Holdings stock price will likely continue rising after releasing its earnings report on Monday.

First, there are signs that the energy drink industry is doing well. On Thursday, Monster Beverage, its rival, said that its revenue rose by 12% in Q1 to $1.9 billion. Other companies in the industry like Coca-Cola and Keurig Dr Pepper also published strong results. 

That is a positive catalyst for Celsius Holdings, which has become the fastest-growing energy drink globally. Its annual sales soared from over $75.1 million in 2019 to over $1.3 billion in 2023, helped by its partnership with PepsiCo.

PepsiCo itself published strong results, helped by its international division and sales prices. Its prices rose by 5% while its international segment accounted for about 40% of its revenue.

Second, there is a likelihood that Celsius will publish strong results. According to Yahoo Finance, analysts expect that the company’s revenue rose by 78.4% in Q1 to over $390 million. The highest estimate is that the company made $411 million.

Analysts believe that Celsius Holding’s revenue will continue this year. The average Q2 estimate is that the revenue figure will come at $464 million, a big increase from $325 million. For the next two financial years, the average target is for the revenue figure to be $1.88 billion and $2.49 billion.

The key driver for Celsius’s revenue figures will be its international division, which still accounts for a tiny part of its total figures. Its North American sales stood at $371 million in Q4 while the international division had about $13.4 million, meaning that there is room to grow.

Third, Celsius, unlike most companies, is focusing on profitable growth. Its annual net profit rose to over $226 million in 2023 from a $187 million loss a year earlier. Analysts expect that its profit per share for Q1 will be $0.19, up from $01.3 a year earlier.

Celsius Holdings stock price analysis

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CELH stock

CELH chart by TradingView

The fourth reason to buy CELH stock ahead of earnings is technical. On the weekly chart, we see that the stock bottomed at $68.88 in April. That was an important level since it coincided with the highest point in September last year, meaning that it has formed a break and retest pattern.

The stock is also in the process of forming a double-top pattern at $99.48. While this is usually a bearish sign, it means that the stock has a 33% upside to get to its highest point. Also, the stock remains above the 50-week moving average.

Therefore, there is a likelihood that the stock will continue rising ahead and after its quarterly earnings report.

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