Celsius Holdings (CELH) has seen its stock plunge 21% over the past six trading days, marking a significant downturn as it hits a 10-month low. The decline comes amid increased competition from Costco’s new Kirkland Signature energy drinks and rising gas prices, which may deter consumers from purchasing premium beverages. Despite this, analysts believe the market reaction is overblown, as Celsius is well-positioned in the functional beverage sector.
The company’s recent acquisition of Alani Nu has driven impressive revenue growth, with projections indicating a 132% increase in the upcoming quarter. Analysts anticipate that Celsius will continue to outperform expectations, with a respectable 24% organic revenue growth forecasted for Q2. Notably, Celsius is trading at a relatively low earnings multiple of 21 times this year’s earnings, suggesting it may be undervalued despite the recent volatility.
For market professionals, the key takeaway is that Celsius Holdings presents a compelling buying opportunity at its current price point, especially given its strong growth trajectory and the potential for earnings estimates to rise further.
Source: fool.com