An Energy Drink Stock That Could Supercharge Your Portfolio : could +100%

An energy drink comeback

CELH has had an ugly 12 months. Celsius Holdings (NASDAQ: CELH) has fallen 75% from its highs set in the spring of 2024. The maker of the Celsius energy drink brand has seen stalling growth with upstart competitors and a complicated situation with its PepsiCo distribution partnership.

With a sugar-free drink marketed towards a healthier lifestyle, Celsius was able to break into the energy drink category and has rapidly gained market share in recent years. Going from a rounding error to 10% market share in the United States, revenue exploded higher in recent years and surpassed $1 billion not too long ago. However, in the last few quarters, sales have declined and were down 31% year over year last quarter.

The first reason was that in 2023, Pepsi ordered too much Celsius inventory for its distribution network, which temporarily inflated the energy-drink company's sales figures. Essentially, it was getting ahead of actual customer demand. This normalized in 2024, which turned a revenue growth tailwind into a temporary headwind.

Secondly, Celsius' market share gains have stalled out in the United States, with other brands like Alani Nu taking share.

I think these are temporary concerns and provide investors with a buying opportunity for the leading sugar-free energy drink brand. The sugar-free sector keeps gaining share versus traditional energy drinks, while the entire category grows.

This is a sector tailwind that should help Celsius. The brand is slowly expanding internationally but wants to put its foot on the gas in 2025, with entries into Europe, Australia, and Canada.

Both these factors will help Celsius grow its sales over the next five years. The stock doesn't look wildly cheap with a price-to-earnings ratio (P/E) of 33, But you need to dive in a lot deeper. Monster has a P/E ratio of 29 and grows at 5%, while Celsius has been growing at 50%. KEEP IN MIND, that PE is assuming that Pepsi will not order anything from Celsius, and when they move their inventory and start ordering again, when the growth start picking up again , oh baby. Distribution from Pepsi is always just a short-term factor. If you got scared by this and didn’t take advantage of the free discount on this stock, you might as well just hide home and jerk off.

Bigger picture, The shift toward healthier energy drinks isn’t just a passing trend—it’s the future of the industry. Consumers today are more health-conscious than ever, and this mindset will only intensify over the next few decades. Traditional energy drinks loaded with sugar and artificial ingredients are losing appeal as people prioritize clean, functional beverages. Fitness culture, extreme sports, and endurance training have all contributed to this demand, but it extends far beyond athletes. Everyday workers, students, and even truck drivers who rely on energy drinks to stay focused are beginning to seek out healthier options. Brands like Celsius are perfectly positioned to capitalize on this shift, offering products with natural ingredients, no sugar, and functional benefits that align with modern health trends. As awareness grows and more people make the switch, healthier energy drinks will dominate the market. So If you believe people are gonna pursue healthier consumption and healthier life style, CELH is a no brainer.

I think this is masking the company's earnings potential. Profit margins should start expanding once the company scales up, and the trailing revenue figures are including the Pepsi inventory wash out. For those with a long-term mindset, now is a perfect time to add the stock to your portfolio.

AT 21, that is a steal deal

All posts reflect Zack's personal opinions on stocks.

This is not financial advice.