What made Celsius stock jump 15% on Thursday?

Piper Sandler says its recent survey discovered the energy drinks of Celsius Holdings Inc (NASDAQ: CELH) remain wildly popular among teen consumers.

Shares of the beverage company are up 15% on Thursday.

Celsius stock is gaining today also because Stifel talked of a recovery in energy drink sales at the US convenience stores in a separate report.

Despite the sharp surge this morning, shares of Celsius Holdings are down well over 60% versus their year-to-date high in late May.

What it means for Celsius stock

Celsius now owns 35% of the market for energy drinks that are particularly well-liked among teenagers, as per the Piper Sandler survey.

That’s significant considering Statista last year pegged the overall market share of CELH in single digits only compared to Monster Beverage at 30% and Red Bull at an even higher 40%.  

Attracting the younger demographic is all the more instrumental for Celsius Holdings also because it may translate to a consistent growth in the company’s market share as these teenagers age up.   

Additionally, the Stifel report bodes well for the Nasdaq-listed firm as convenience stores generate a whopping 62% of the total energy drink sales.

So, the pick-up could soon be reflected in CELH’s top line and eventually in its stock price.

All in all, the fundamentals make a strong enough case for owning Celsius stock, but does its current valuation recommend the same as well? Let’s find out.

Celsius shares are not cheap per se

Celsius Holdings is now getting a bigger piece of a growing market.

In and of itself, that spells “buy”. But there’s a caveat. Shares of the Florida-based company are not inexpensive to own at 30 times earnings.

On the flip side, however, the Piper Sandler and Stifel report on Thursday suggests the energy drink company looks poised for accelerated growth in the coming years.

Note that CELH came in handily above Street estimates in its latest reported quarter.  

Wall Street currently expects Celsius to more than triple its per-share earnings from 77 cents last year to $2.74 in 2028.

That’s why analysts currently rate Celsius stock at “buy”. Their average price target of $46 indicates potential for another 35% upside over the next 12 months.

In conclusion, while CELH shares may not look particularly cheap at writing, the growth prospects do justify building a position in them as long as you have a sufficient risk appetite.

Our market expert Crispus Nyaga also sees a possibility of a rebound in Celsius stock.