Celsius Holdings, Inc. NASDAQ: $CELH) is a holding company that offers carbonated and non-carbonated energy drinks under the CELSIUS Original brand. Its beverages are marketed via various channels, including convenience stores, grocery stores, drug stores, nutrition stores, and gyms.
Before markets opened on Thursday, February 29, 2024, Celsius Holdings released its fourth quarter results for fiscal year 2023 to a positive market reception.
Celsius Holdings Fourth Quarter Results
Celsius reported a record revenue in the fourth quarter of $347 million, a 95% increase from the $178 million reported the previous year and above forecasts of $329 million. Net income for Q4 was $39 million, or an EPS of $0.17, compared to a $28M net loss, or -$0.12 per share the previous year, and above estimates of $0.15.
The company’s non-GAAP adjusted EBITDA increased 387% to around $65 million, a huge improvement from the $13 million reported the previous year. The rise in adjusted EBITDA was driven by the huge revenue surge, improved margins, and continued leverage across SG&A.
Celsius reported a record revenue of $1.32 billion for the full year, a 102% increase from the $654 million reported in FY22. Net income in FY23 was reported at $182 million, or $0.77 per diluted share, a massive increase from the net loss of $198.8 million or -$0.88 per share the previous year.
Celsius’ non-GAAP adjusted EBITDA rose 316% in FY23 to $296 million, compared to $71 million the previous year.
As of December 31, 2023, the company had $756 million in cash and cash equivalents, an improvement from the $653 million reported the previous year, which included $39 million in restricted cash tied to distributor termination payments.
Celsius Financial Highlights
In its Q4 report, Celsius pointed out that in 2023, it was the #1 Dollar and Uni Growth brand in Total US U.S. multi-outlet with convenience store (Mulo+C). On Amazon, the Celsius brand was the highest-selling energy drink, holding a 19.7% market share of the Energy Drink category, surpassing Monster Energy, which held a 19.6% share for the last 14 weeks of 2023.
The company also noted that as of the last four weeks of 2023, Celsius was the #3 energy drink in Mulo+C, with a 10.5% market, more than double the 4.9% market share it held the previous year.
Celsius Holdings Stock Performance
Celsius (CELH) stock experienced a slight drop in the opening trade before it rallied 20.44% on Thursday, February 29, 2024, to close at $81.62 per share. The day’s rally was driven by the positive fourth quarter and full-year results, which beat revenue and earnings estimates.
In the past 12 months, CELH stock is up 114.51%, compared to the 25.31% gain of the S&P 500 in the same period. Its last closing price is close to its 52-week high of $82.74 and above its 50-day and 200-day moving averages of $56.85 and $54.01, respectively.
Celsius Stock Forecast
According to 9 Wall Street analysts, CELH stock has an overall strong buy rating. The stock is forecast to have an average price of $71.04 in the next 12 months, with the most optimistic analyst forecasting $83.33 while the most pessimistic forecast $65.
Based on the average price target, CELH will experience a -12.96% change in the next 12 months. However, analysts will likely change their forecast in the next few months based on the strong Q4 results and the company’s expanded market share.
Should You Buy CELH Stock?
An effective marketing campaign drove Celsius’ strong revenue growth. As a result, while sales more than doubled, their sales and marketing budget only increased by 45%. Celsius managed to expand its market share and held a 10.5% market share in Mulo+C in the last four weeks of 2024.
The company signed multi-year sponsorship deals with several MLS soccer teams and one F1 Team in Q4. Its marketing campaign is mainly focused on the Celsius brand instead of specific flavors, a strategy that bore great results.
While earnings and revenue experience phenomenal growth, signaling solid performance in the coming months, the stock is expensive. On Thursday, February 29, the stock rose to a new all-time high.
However, the premium pricing of the stock makes sense, considering its revenue growth and surprisingly positive net income. Consequently, the current high multiples, including a foreword P/E ratio of 71.43, are justifiable.
It has a healthy balance and signed a long-term distribution partnership with PepsiCo in August 2022. As such, the company will most likely grow into its high valuation. Based on its recent results, the analysts’ strong buy rating accurately represents the stock’s performance in the medium term.Â
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