On Monday, Roth/MKM reiterated its Buy rating on Celsius Holdings (NASDAQ:CELH), with a consistent stock price target of $105.00. Celsius Holdings has seen substantial growth in revenue and profitability, which has propelled its U.S. energy drink market share beyond 10%.
The company's adjusted EBITDA margin has reached over 20%, with its market capitalization climbing to $19 billion. According to the firm, while the current stock valuation reflects much of Celsius's performance, future developments are expected to be favorable.
Celsius Holdings has been characterized by significant share price fluctuations, a trend that is anticipated to persist. Despite transitioning from a small-cap to a mid-cap company, Celsius continues to experience volatility levels nearly four times higher than the S&P 500 over the past five years. However, it has also provided returns that are eight times greater, resulting in a more favorable return/risk ratio.
The firm noted that while the equity markets have generally favored Celsius over the last four years, the journey to its current valuation has encountered challenges. The analysis included in the note highlights the various price drops and subsequent recoveries, including potential causes for these movements.
The conclusion drawn by the firm is that investors should be prepared for ongoing volatility when it comes to Celsius shares. Nonetheless, they suggest that the rewards for those who remain patient have been historically significant, with past performance indicating a trend of recovery and growth following periods of price declines.
InvestingPro Insights
The financial landscape for Celsius Holdings (NASDAQ:CELH) offers a multifaceted view, according to recent data from InvestingPro. With a market capitalization of $19.3 billion, the company stands out in its sector.
The P/E ratio, a measure of a company's current share price relative to its per-share earnings, is notably high at 105.98, reflecting a premium that investors are willing to pay for future earnings growth, which is supported by a PEG ratio of 0.57—indicating potential for earnings growth in relation to the P/E ratio. Moreover, the company's revenue growth over the last twelve months has been impressive, clocking in at 101.65%, showcasing its rapid expansion in the market.
InvestingPro Tips highlight that Celsius Holdings holds more cash than debt, providing financial stability, and analysts anticipate sales growth in the current year, signaling continued market confidence. Still, it is worth noting that the stock has experienced a significant drop over the last week, and two analysts have revised their earnings downwards for the upcoming period. For investors looking to dive deeper into the financial metrics and future outlook of Celsius Holdings, there are 19 additional InvestingPro Tips available. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription to access these valuable insights.
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