The stock of Celsius Holdings has plummeted, making a highly popular company among investors toxic. The stock price has fallen from $100 to $22 in the year 2024. The market capitalization has fallen from $22 billion down to $5 billion, a loss of $17 billion. Is CELH a great stock to buy before earnings come out?
The growth of Celsius Holdings has slowed down
The stock of Celsius, an energy drink manufacturer, has been on a rollercoaster ride in recent years. The company’s stock price soared from less than two dollars in 2020 to more than $100 in last year, as the demand for their drinks increased in the US.
CELH’s stock price surge coincided with the signing of a deal for distribution by PepsiCo – the largest competitor to Coca-Cola. This partnership was similar to that between Monster Beverages, Coca-Cola and PepsiCo.
Pepsi will distribute Celsius’s products, and in return earn a percentage. The deal is mutually beneficial since Celsius does not have to invest in logistical support.
This helped Celsius Holdings become the fastest growing company in the industry of energy drinks. The company’s revenue increased from $75.1m in 2019 to $1.38b in 2023.
There are recent signs, though, that growth has slowed, even as the firm focuses its efforts on expanding internationally. Recent results show that the company’s third-quarter revenues dropped by 31%, to $265 millions.
The gross margin fell by 440 points, to 46%. Its net income plummeted by 92% and reached $6.4 million. Analysts had expected much better numbers. These numbers confirmed that multiple Nielsen reports showed a continued decline in shipments of its products to retail outlets.
CELH Earnings ahead
Earnings, scheduled for Thursday, will provide more information about its performance and whether it has improved. The numbers provided will give more information about the company’s performance. In an Invezz note, WedBush’s analyst said:
The latest Nielsen figures show that Celsius Holdings isn’t doing well. I’m assuming that its revenue for the fourth quarter will be $305,000,000, which is a significant drop from $347,000,000 it earned a year ago. “I also anticipate that the international part of their business will be a very small percentage.”
The average estimate of 15 Wall Street analyst is less than his. Analysts predict that revenue totals will be $330m, down 4.78% compared to a year ago. This will increase its revenue by $1.36 Billion.
Analysts predict that Celsius’ earnings per share, which were $0.15 last year, will fall to $0.1 this year. The stock will rise if there are signs that business has stabilized.
CELH’s stock price has formed a bullish trend: Is it a good time to buy Celsius?
Celsius Holdings stock price forecast
CELH’s share price is shown on the daily chart to have fallen in recent months. The crash occurred after the CELH share price formed a pattern of a double top at $100. Double-tops are a common bearish pattern of reversal that can lead to further downside.
CELH has been in a narrow range for most of this year, as investors await the next earnings. The accumulation indicator and the distribution indicator have both continued to fall. The indicator has formed a falling wedge, which is a bullish sign.
If earnings exceed expectations, then the stock could stage a big comeback. The next level to monitor is $32.6. This was the high point in December of last year. If the results are less than expected, a crash under $20 may also occur.
This CELH analysis is a good buy following the wipeout of $17 billion? This post may change as new information becomes available
