Pull up a Celsius Holdings (CELH 2.18%) stock chart, and you'll see plenty of its signature bubbles. The stock is a 57-bagger over the past five years, making it one of market's hottest stocks in that time. Even the most sparkling of beverages will eventually go flat. Could that moment come for Celsius later this week?
The company behind the popular canned beverages that promise a safe boost in increased metabolism reports fresh financials this week. Expectations are high, but Celsius has a knack for jumping even higher.
NASDAQ: CELH
Key Data Points
Springing for effervescence
Investors should see some pretty scintillating growth when Celsius reports financial results before Thursday's market open. Analysts see revenue soaring 85% to $329.9 million in the fourth quarter, capping what would be its third consecutive year of 99% or better in top-line gains.
The news could be even better on the bottom line. Wall Street pros are modeling a profit of $0.15 a share, reversing a modest deficit from the prior year's holiday quarter. If 2023 wraps up the way the year has been playing out so far Celsius could earn a lot more than what the market is expecting.
| Quarter | EPS Estimate | EPS Actual | Beat |
|---|---|---|---|
| Q1 2023 | $0.07 | $0.13 | 86% |
| Q2 2023 | $0.09 | $0.17 | 89% |
| Q3 2023 | $0.16 | $0.30 | 88% |
Data source: Yahoo! Finance. EPS = earnings per share.
These aren't typos. The only thing larger than the 85% year-over-year revenue growth that analysts are modeling is the string of 86% to 89% bottom-line beats that Celsius has delivered this year. Until analysts wake up or the functional beverage speedster proves mortal, it's hard to bet against another beat this week.
Image source: Getty Images.
More suds than duds
A lot has been going right for Celsius since PepsiCo (PEP 1.40%) cut a $550 million check for an 8.5% convertible preferred stake in Celsius two summer ago. PepsiCo is obviously feeling pretty good about an 8.5% stake that is now worth more than $1.3 billion. PepsiCo is also benefiting from being tapped as Celsius' exclusive stateside distributor as part of the initial investment.
Celsius is still the bigger winner here. PepsiCo has helped open new doors -- refrigerated, if you please -- for Celsius cans. PepsiCo initially introduced the beverage stock's expanding product line in hotels, casinos, and even airport gift shops. Some of the soda giant's more recent scores have been high-traffic fast-food chains including thousands of Jersey Mike's and Dunkin' locations.
The PepsiCo deal was initially hailed as a way for Celsius to expand its reach beyond its U.S. stronghold. However, it has largely helped Celsius sustain its hearty domestic growth spurt. North America sales have soared 108% through the first nine months of the year, well ahead of the 46% uptick internationally. Instead of nudging the revenue mix internationally Celsius finds itself generating 96% of its sales on its home turf.
Things could start to change in 2024. PepsiCo became Celsius' distributor in Canada last month. Celsius also announced that it was partnering with a different distribution partner to expand in Great Britain and Ireland. Is this the year Celsius finally turns into a globetrotter? It may as well, having spent the last five years rocking the world of its longtime shareholders.
