Celsius Holdings (CELH -1.39%) has been one of -- if not the -- best investments in recent times, skyrocketing a whopping 3,000% over the past five years. It has experienced tremendous growth, gaining market share in its industry at a rapid pace. Even this year, Celsius shares are up 45%, crushing the broader indexes. 

Investors might be tempted to hop on the beverage stock's bandwagon in the hopes of riding the momentum to strong portfolio returns. To be fair, there are intriguing reasons to own the stock. But there's also an important reason to be patient. 

Let's take a closer look at Celsius. 

Compelling reasons to be a shareholder 

It's probably impossible to overstate Celsius' incredible growth. In 2022, revenue of $654 million was almost 800% greater than just three years earlier. Expanding its selling footprint to a range of retailers, like mass market, e-commerce, grocery, and convenience, among others, has certainly helped. And finding new channels, such as colleges and universities, can propel the business even more. 

Consumers just love their energy drinks, despite the debated health benefits of these products. This fantastic growth is a key reason why investors should consider buying the stock right now. 

Furthermore, while most hypergrowth enterprises struggle when it comes to generating profits, Celsius has proven that it has no issues in this regard. In the first quarter of 2023, net income rose 413% year over year, much faster than the top-line gain. Management hopes to keep driving sales and market efficiencies, as well as continuously improving and optimizing its internal processes.

That operating leverage is exactly what investors like to see from a business that is scaling as quickly as this one. And it's another compelling reason to become a shareholder. 

And finally, Celsius isn't resting on its laurels. Last August, management sold preferred stock in the business to PepsiCo, simultaneously making the soft drink giant a distribution partner of the energy drink specialist. Pepsi is a global enterprise, and this will help Celsius expand outside the U.S. International sales represented just 4% of overall revenue in Q1. 

This move is a page straight from Monster Beverage's playbook. The large-cap energy drink company partnered with Coca-Cola in 2014 to help handle its distribution capabilities. And since that deal, Monster shares have climbed 381%, an impressive gain. Perhaps the agreement between Celsius and Pepsi can lead to a similar result. 

The valuation is rich 

Without a doubt, Celsius is a booming business that appears to be firing on all cylinders right now. But the question that investors need to ask is: How much am I willing to pay for all this?

Celsius shares have trounced the market and trade now near their all-time high. Consequently, they are by no means cheap, selling at a price-to-earnings (P/E) ratio of 379 (as of June 29). That's nearly 8 times as expensive as Monster's trailing P/E ratio. Celsius' forward P/E multiple is also sky-high, standing at 109. 

For growth-oriented investors, valuation might not play any factor in your decision-making process. And so owning Celsius is probably an easy call. The hope is that soaring sales and profits will keep pushing the stock higher. 

But in my opinion, I see no margin of safety with the stock right now as all the optimism seems to be fully priced in. Therefore, unless there's a meaningful pullback, now doesn't really look like the best time to buy shares. 

To be clear, investors shouldn't try to time to the market, as this is generally a losing proposition. However, I believe it's always a good idea to consider valuation when you are looking to buy a stock. For those who are still really bullish on Celsius, maybe dollar-cost averaging is the way to go.