On Tuesday, CFRA began coverage on shares of Celsius Holdings (NASDAQ: NASDAQ:CELH) with a Hold rating and a price target set at $65.00. The firm highlights Celsius as one of the top growth stories within the beverage industry, acknowledging its emergence as a significant competitor to established brands like Monster (NASDAQ:MNST) and Red Bull in the energy drinks sector. This segment was the fastest-growing in the U.S. non-alcoholic beverage market in 2023, with a 5.7% increase in sales volume and a 13.3% rise in retail sales dollars year-over-year.
The price target is based on a 12-month forecast and reflects a projected P/E ratio of 43.3 times for the year 2025. CFRA's outlook is backed by an anticipated growth in adjusted earnings per share (EPS), predicting a rise to $1.10 in 2024 and $1.50 in 2025, up from $0.03 in 2022 and an estimated $0.79 in 2023.
Despite the strong growth narrative, CFRA suggests that the current stock valuation already accounts for the company's potential. They note that while Celsius's financials are robust, with $878 million in net cash and strong free cash flow, the forecasted slowing growth rates present a concern for the future.
The report also mentions a notable decrease in short interest in the stock, which has fallen to about half of what it was a few months prior, representing roughly 9% of the float. This reduction in short interest could indicate a shift in market sentiment towards the stock.
CFRA's analysis comes in the context of a broader U.S. non-alcoholic beverage market that experienced a significant volume decline of 1.2% last year, marking the steepest drop since 2009. In contrast, Celsius has managed to carve out a successful niche in the growing energy drinks space, which has been a bright spot in the market.
In other recent news, Celsius Holdings Inc. reported a significant 37% year-over-year revenue increase for the first quarter of 2024, reaching a new high of $355.7 million. Despite some inventory challenges, the company continues to expand its product range and distribution footprint, including plans for international expansion. In analyst notes, Piper Sandler maintained an Overweight rating for the company, highlighting the potential for ongoing, volume-driven market growth. The firm also reaffirmed its sales forecast for Celsius, maintaining an estimated revenue of approximately $1,590 million for the year 2024 and around $1,845 million for 2025.
BofA Securities updated its outlook on Celsius Holdings, increasing the stock's price target to $84 from $80 and adjusting its sales forecast from $385 million to $390 million. Morgan Stanley (NYSE:MS) maintained its Equalweight rating and $75.00 price target for the company, acknowledging potential for expansion in the U.S. market. Meanwhile, UBS adjusted the price target for Celsius Holdings shares to $92.00 from the previous target of $99.00, maintaining a Buy rating on the stock. The company reported first-quarter 2024 adjusted earnings per share (EPS) of $0.27, surpassing consensus estimates. These are the recent developments for Celsius Holdings Inc.
InvestingPro Insights
With Celsius Holdings (NASDAQ: CELH) capturing attention as a growth story in the competitive energy drinks market, real-time data from InvestingPro offers an additional layer of insight for investors. The company's robust revenue growth is evident, with an impressive 81.22% increase over the last twelve months as of Q1 2024. This is complemented by a strong gross profit margin of 49.62% in the same period, showcasing the company's ability to maintain profitability amidst expansion.
InvestingPro Tips suggest that Celsius is well-positioned with more cash than debt on its balance sheet, providing financial stability. Moreover, analysts forecast sales growth in the current year, aligning with CFRA's optimistic revenue projections. However, it is important to note that the stock's price volatility and the significant drop over the last month may be of concern to some investors. For those looking for further guidance, there are additional InvestingPro Tips available, which could be particularly valuable in assessing the potential risks and opportunities associated with Celsius Holdings.
For investors seeking in-depth analysis and more tips like these, InvestingPro offers a comprehensive suite of tools to aid in making informed decisions. Take advantage of an extra 10% off a yearly or biyearly Pro and Pro+ subscription with the coupon code PRONEWS24. Discover the full range of insights available on InvestingPro, including the 18 additional tips for Celsius Holdings.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.