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Why Celsius Holdings Stock Jumped Today

By Howard Smith - May 13, 2021 at 3:30PM

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First-quarter 2021 results showed strong revenue growth for the fitness drink maker has continued.

What happened

Fitness and health drink maker Celsius Holdings ( CELH 8.31% ) reported first-quarter 2021 results today that showed volume and sales growth has continued to accelerate. Investors cheered the report, sending shares up 14.5% as of 3 p.m. EDT.

So what

The Florida-based maker of drinks used by athletes and fitness buffs reported revenue in the first quarter jumped 78% over the year-ago quarter, led by sales growth in North America. Net income edged up 7% compared to the prior year period. The results follow a strong 2020, where full-year revenue grew 74% year over year, and it was announced the company would join the S&P SmallCap 600 index

woman in gym drinking fitness drink after exercise

Image source: Getty Images.

Now what

Sales in the company's U.S. home market more than doubled in the first quarter, making up almost 80% of total revenue. The growth Celsius has shown in the past year hasn't gone unnoticed by investors. Shares have soared more than 700% in the last 12 months.

CELH Chart

CELH data by YCharts

Celsius said domestic growth was mostly driven by sales in traditional retail channels as it has expanded its list of retail and distribution partners. But the company also reported 33% sales growth in fitness channels, despite pandemic-related impacts that have reduced the use of gyms and fitness centers. 

Growth stocks are typically priced with high valuations and Celsius is no exception, with a forward price-to-earnings ratio of over 400. But for those with a long time horizon, the company has proven its products have a good following.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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Stocks Mentioned

Celsius Holdings, Inc. Stock Quote
Celsius Holdings, Inc.
CELH
$70.17 (8.31%) $5.38

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