On Nov. 6, Celsius Holdings (CELH 2.77%) delivered a third-quarter report that revealed sensational revenue growth of 173%. But investors wouldn't guess that the energy drink company was clocking such torrid growth from the movements of its stock price. As of this writing, Celsius stock is down about 30% from the 2025 high it hit in late October.
Moreover, Celsius stock is down more than 50% from the all-time high that it hit back in 2024. In short, Celsius has underperformed the S&P 500 over the last three years.
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It seems that the most recent drop for Celsius stock was because it reported a large $61 million Q3 net loss. But if I had to venture a guess, I would say that unlike the past three years, Celsius stock will reverse course and be a big winner for shareholders over the next three years. Allow me to briefly explain why.
Where Celsius is at now
Growth-stock investors are likely captivated by the statistic I led with: 173% top-line growth. But keep in mind that the lion's share of that growth came from acquisitions. The company acquired competitor Alani Nu earlier this year, and that brand contributed $332 million in Q3 revenue. It also acquired the Rockstar brand from PepsiCo before the end of the quarter.
NASDAQ: CELH
Key Data Points
Many investors prefer organic growth to growth by acquisitions. And it makes sense. Acquisitions can be hard to integrate. And if the core business is in decline, the management team could eventually cause the newly acquired business to decline as well.
That said, Celsius is still delivering growth with its namesake brands. In Q3, scanner data showed 13% sales growth for the Celsius brand. Management recommends that investors pay closer attention to the scanner data in this case because revenue metrics can be impacted by factors such as the timing of shipments and variance in when it books its sales. The high-level takeaway, though, is that consumers are grabbing Celsius products more than ever.
Alani Nu provides the company with an explosive growth opportunity. Sales of Alani Nu doubled year over year in Q3, which is incredibly promising at this stage. Celsius has a distribution deal with Pepsi. But Alani Nu's products won't enter Pepsi's distribution system until December. Therefore, it's possible that Alani Nu's growth will accelerate once that happens.
Furthermore, Celsius is achieving its incredible top-line growth even while it's widening its profit margins. In Q3, the company had a gross margin of 51% compared with 46% in the prior-year period.
In summary, Celsius is in a great place right now in spite of what its stock price action would lead one to believe.
Where Celsius could be someday
Here's why I believe Celsius stock could be a good performer from here: Its growth is ongoing, its margin improvements are real, and its valuation is reasonable.
First, Celsius has opportunities for growth domestically and abroad. Domestically, the Alani Nu brand will likely get a boost from the Pepsi deal, which is a tantalizing prospect considering it's already doubling sales year over year. With an 11% market share in the energy drink category, the Celsius brand is more saturated in the U.S. market, making growth tougher. But its international expansion is picking up steam, as evidenced by its 30% international revenue growth through the first three quarters of 2025.
Second, Celsius is improving its profits even though it might not look like it. In Q3, the company reported a $61 million net loss. But this was due to one-time charges, including the costs involved in switching Alani Nu's distribution to Pepsi's network, which will pay off over the long term. Its newly acquired Rockstar brand could temporarily skew the numbers here, but management is vowing to improve Rockstar's margins as well.
However, excluding the one-time charges from distribution changes, Celsius has earned $1.10 per share through the first three quarters of 2025, twice as much as it made in the comparable period of 2024. In short, the profit expansion is real.
In the wake of its stock price slump, Celsius stock trades at about 5 times sales, well below its five-year average.
CELH PS Ratio data by YCharts.
Considering that double-digit percentage growth for Celsius is ongoing and its profits are soaring (when factoring out one-time costs), I believe Celsius stock is a bargain for long-term investors.
My bold prediction is that Celsius will hit new all-time highs within the next three years as all of these positive trends play out. And that would amount to a greater-than-100% upside from today's price.
