Shares of energy drink maker Celsius Holdings (CELH 5.75%) soared after the company reported fourth-quarter and full-year 2023 results this week. Celsius stock has rocketed nearly 50% this year, but about half of that was from its surge this week. As of Friday afternoon, shares were higher by about 25% just this week, according to data provided by S&P Global Market Intelligence.
NASDAQ: CELH
Key Data Points
Swinging to profits
Celsius' huge growth in product sales led it to a full-year profit of $0.77 diluted earnings per share. That compares to a loss of $0.88 for 2022. For the full year, international revenue jumped by 52% while sales in North America soared by 105%. Maybe more importantly, gross margin expanded by 660 basis points or more than 6 full percentage points to 48%.
Celsius CEO John Fieldly said in a statement that the growth has been "driven by expanded availability of our products and increased consumer awareness. We continued to drive growth of the category by bringing in new loyal consumers, as well as increasing consumption occasions."
Is Celsius stock a buy?
Now that it's generating profits, Celsius is no longer the speculative stock it once was. Growth stocks are typically expensive, and Celsius falls in that category. One big catalyst for its recent success is the distribution partnership it started with PepsiCo nearly two years ago. That seems to be paying off in a big way.
While its valuation from traditional metrics remains high, that partnership may help the company with its roadmap for international expansion. The Pepsi relationship is only for North America, but Celsius' international sales have been accelerating.
If it can use its North American success as a template, there may be much more growth ahead that could be led by international markets. Celsius is a growth stock that might be worth paying up for.
