Piper Sandler’s recent survey found that the energy drinks from Celsius Holdings Inc. (NASDAQ: CELH), remain extremely popular among teens.
Shares of the beverage firm are up 15% Thursday.
The stock of Celsius is also up today because Stifel reported in a separate report that energy drink sales in US convenience stores are recovering.
Despite the sharp rise this morning, shares in Celsius Holdings have fallen by well over 60% since their high for the year to date in late May.
What this means for the Celsius stock
According to a Piper Sandler study, Celsius owns 35% market share for energy drinks which are especially popular among teenagers.
Statista’s last year report on the CELH market showed a single-digit share, compared to Monster Beverage (30%) and Red Bull (40%) which were both higher.
Attracting the younger demographic may also translate into a consistent increase in the market share of the company as these teenagers grow older.
The Stifel report is also a positive sign for the Nasdaq listed company, as convenience stores account for 62% of all energy drink sales.
The improvement in CELH could be reflected soon in the company’s top-line and, eventually, in its stock price.
Overall, the fundamentals are strong enough to recommend owning Celsius stock. But does its current value also suggest the same? Let’s find it out.
The cost of Celsius shares is not cheap.
Celsius Holdings now has a larger share of a growing industry.
This is enough to make you want to “buy”. There’s one caveat. At 30 times earnings, the shares of this Florida-based company do not come cheap.
The report by Piper Sandler and Stifel on Thursday, however, suggests that the energy drink company is poised for an accelerated growth over the next few years.
CELH’s latest reported quarter was a big surprise. Its results were well above Street expectations.
Wall Street expects Celsius’s earnings per share to more than triple from 77 cents in 2018 to $2.74 by 2028.
Analysts rate Celsius stock as “buy”. Their average price target is $46 and indicates that there could be another 35% increase in the next year.
While CELH shares might not appear to be particularly cheap when written, their growth prospects are worth taking a position if you have a high risk appetite.
Crispus Nyaga, our market expert, also sees the possibility of a recovery in Celsius stock.
What caused Celsius stock to jump 15% on Thursday? This post What caused Celsius stock to jump 15% on Thursday? appeared first on The ICD
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