Celsius (CELH 4.18%) stock dropped 17% as of 12:30 p.m. ET today as the market absorbed new Nielsen data.
For the week ending May 18th, the energy drink maker saw sales growth decline sequentially to 39%. While this figure is higher than the company's 37% sales growth in the first quarter of 2024, Celsius saw its market share dip from 10.8% to 10.5%.
Making matters worse, Morgan Stanley analyst Dana Mohsenian warned that Celsius could see slower growth as it laps the growth it saw from the start of its PepsiCo deal.
However, this data focuses on one week's worth of sales. Here's why Celsius remains interesting over the longer term.
NASDAQ: CELH
Key Data Points
Can Celsius keep its growth story going?
Though Celsius's days of triple-digit sales growth have probably come to an end, the company still offers investors a promising investment thesis.
Looking through a slightly shorter-term lens for a second, the company expects to see its best retailer shelf space gains in company history this year. With retailers scrambling to capitalize on Celsius's surging popularity, these spring shelf resets could lead to a healthy growth bump starting in July. With PepsiCo's distribution heft backing its operations, Celsius is now able to go toe-to-toe with big dogs like Monster and Red Bull for this valuable product placement.
Over the longer term, the company has big ambitions in international markets. In January 2024, Celsius began selling in Canada with PepsiCo's help. Meanwhile, it recently signed numerous agreements with Japanese beverage giant Suntory to expand to the United Kingdom, Ireland, France, New Zealand, and Australia.
With international sales only accounting for 5% of the company's sales, these new markets keep Celsius deserving of its premium valuation. However, with high growth rates like these, volatility will always follow Celsius wherever it goes.
