Celsius Holdings (CELH -2.02%) has made a name for itself in recent years as a top energy drink company. And for a while, it was looking like an unstoppable growth stock to own. Investors who bought the stock in the hopes that its gains would continue, however, have been hugely disappointed. This year alone, the stock is down more than 40%, as it has nearly wiped out the gains it has amassed over the past five years.
How could things have gone so wrong for Celsius Holdings, and could the stock head even lower, or is now a good time to buy it?
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The company's growth has been volatile
To be a top growth stock, a company has to deliver just that -- growth. While Celsius' business has become much larger over the years, investors simply aren't thrilled with its inconsistent and sharply declining growth, which is evident in the chart below.
CELH Revenue (Quarterly YoY Growth) data by YCharts
At 10.6%, that's a decent level of growth for the business in its most recent quarter, but it's also far less than what it has averaged over the past five years. But growing at a high rate of more than 20%, let alone 80%, is not easy to do, especially at a time when consumers are battling higher costs and looking for ways to save, rather than splurge.
The business is already fairly large, generating roughly $818 million in revenue during its most recent period, which went up until the end of June. Alani Nu, which Celsius acquired in April 2025, contributed $364 million. It has now been transitioned into PepsiCo's distribution system. PepsiCo and Celsius have a strategic long-term relationship that has helped Celsius achieve significant growth over the years, and it may help Alani Nu reach new heights as well.
NASDAQ: CELH
Key Data Points
Is Celsius Holdings a cheap stock to buy right now?
There's been some volatility with Celsius' stock this year as question marks about its growth and leadership have been weighing on its valuation. However, I think with it still being in the early innings of incorporating Alani Nu into its business, there may be much more growth ahead. The market has been punishing Celsius' stock, but the business is still performing well at a time when economic conditions may not necessarily be ideal.
The beverage stock is trading at 18 times its estimated future earnings (based on analyst estimates), which is attractive given that the average stock on the S&P 500 trades at 21 times its expected future profits. For long-term investors who are willing to be patient, now could be a good time to start a position in Celsius.
