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Following a recent rally of 20.5%, shares of Celsius Holdings (NASDAQ:CELH) are gaining popularity again, especially as the stock reaches 90% of its 52-week high and shows enough momentum to potentially push investors toward a new peak for the year. However, there is one major speed bump standing in the way of today’s price and that higher promise.
That earnings uncertainty acts as a speed bump for the company’s quarter, as Celsius stock has fallen about 5% in a week just before the upcoming release on August 7, 2025. This behavior can usually be perceived in two different ways, and the first, being the most common, is that the market is expecting some disappointing results from Celsius.
The other side to this coin is that the price is now low enough to have priced in some of these bearish expectations, creating a much better risk-to-reward ratio and probability setup for those willing to buy the dip and keep riding on the company’s momentum, which has seemed unstoppable over the past year. Here are some reasons Celsius might make it out okay after earnings.
A New Wave of Wall Street Optimism
Wall Street analysts rarely give their ratings and valuation targets right before a stock announces quarterly earnings, which is why investors should see the upcoming wave of upgrades in late July 2025 as a sign of confidence heading into the results.
While the consensus rating for Celsius stock stands at a Moderate Buy, along with a price target of $47.8 per share, a few analysts were willing to break the mold. Filippo Falorni sees a Buy rating and a $55 per share valuation on Celsius to call for 31% upside potential from today’s prices.
Falorni wasn’t alone in this, as Andrea Teixeira from JPMorgan followed suit with her Overweight view and $54 per share target price, roughly in line with Citigroup’s view. Overall, it seems that the potential range to be had on Celsius hovers between $54 and $57 per share, giving investors a shot at not only double-digit upside but also new 52-week highs.
If the company can deliver on this, it shouldn’t be surprising to see some institutional buyers step in as well, since most of them use a momentum strategy supported by the right fundamental story. However, while that part of the picture is still uncertain, there is some additional evidence to consider about Celsius beforehand.
Fundamentals Scared Short Sellers Away
Over the past month, 13.8% of Celsius stock’s short interest was wiped out of the picture in a clear sign of bearish capitulation. More than that, there is still $976.6 million worth of open short positions. If the stock can deliver a decent quarter and break through to these Wall Street targets, chances are those may be closed out, too.
Closing a short position indirectly adds more buying pressure to a stock since it involves buying back the stock short sellers borrowed to sell in the first place. Now, other fundamental factors are at play here that could very well push Celsius toward those new highs.
First, Wall Street analysts are set on a forecast for $0.24 in earnings per share (EPS) for the third quarter of 2025, a jump of 33.3% from today’s reported 18 cents in EPS. Knowing that EPS growth is the typical driver behind a stock’s upside, this view matches perfectly with the percentage upside expected from valuation targets.
Looking at the last quarterly earnings, there is one clear theme that investors should keep in mind and look for in the upcoming quarterly announcement. Celsius reported a 1.15% increase in its gross margin despite a 7% decline in revenue, and the reason why is all that matters.
As the brand and company expand into more international markets, its economies of scale allow it to spread costs across different operations and thus make it more efficient. Considering the bulk of revenue contraction occurred in the United States, possibly due to spreading tariff fears in the consumer discretionary sector, this should already be factored in.
Moving forward, a more confident consumer in the United States could push that revenue figure for North America higher, building on top of the 41% revenue growth seen in the international segment. With all these tailwinds in mind, backing the expected upside and EPS growth, there is one last factor to consider here.
Markets are now willing to pay up to 132.6x in a price-to-earnings (P/E) ratio for Celsius stock, a long way above the rest of the industry’s 18.1x average. The market’s pricing mechanism is always willing to place a premium on those companies that can outgrow their peers and the broader S&P 500, and this time, Celsius justifies that premium.