Celsius Holdings (NASDAQ: CELH) It’s been a great growth stock to own, with both sales and earnings soaring over the past decade. But this year has been a nightmare for the energy drink company’s shareholders. Growth rates slowed, and stock prices fell into free fall as future prospects became uncertain.
Year to date, Celsius’ stock price is currently down more than 35%. Stocks could be headed for their worst year since 2011. Is Celsius in big trouble, or might now be a good time to invest in the energy drink company?
Celsius stock has generally been a solid investment.
Celsius has been one of the best growth stocks over the past decade with tremendous growth. Life-Changing Earnings For investors. Below is a breakdown of annual returns by year.
|
year |
celsius stock returns |
|---|---|
|
2023 |
57.2% |
|
2022 |
39.5% |
|
2021 |
48.2% |
|
2020 |
941.6% |
|
2019 |
39.2% |
|
2018 |
-33.9% |
|
2017 |
114.3% |
|
2016 |
26.3% |
|
2015 |
288% |
|
2014 |
47.1% |
|
2013 |
68.7% |
|
2012 |
-4% |
|
2011 |
-50% |
Data source: YCharts.
Aside from the “off” year in 2018, this stock has been generating solid annual returns of at least 20% per year pretty consistently over the past decade. This includes an exceptional year in 2020, when it rose more than 900%. The problem is that if stock prices rise too much, expectations are inflated, making it difficult to maintain a hot buying trend. growth investor.
Why is Celsius stock struggling so badly this year?
Chelsea’s business has experienced remarkable growth over the years, establishing itself as one of North America’s leading energy drink companies. However, sales growth has slowed this year. The Company’s key distribution partners; pepsicoWe have also decided to reduce our stock of Chelsea products. This is a worrying sign that growth may slow further in coming quarters and the overall outlook may not be very encouraging.
Investors used to be accustomed to paying high multiples for Celsius stock, but have become less willing to do so as growth prospects have become more uncertain. Today, the stock trades for more than five times trailing earnings. This is a big adjustment compared to how highly investors previously valued the stock.
Through the first half of this year, Celsius reported total sales of $757.7 million, a 29% increase compared to the same period last year. That’s not a bad growth rate by any stretch, but in the past it wasn’t uncommon for companies to double their revenue. Perhaps because Celsius no longer looks like a growth machine, investors have adjusted the premium they are willing to pay for the business.
Is Celsius stock currently a good contrarian?
Celsius has been profitable recently and is trading at about 32 times next year’s earnings, according to analysts’ future earnings expectations. For a company that is still growing at around 30%, this doesn’t seem like an unreasonable multiple. And with Celsius in the early stages of its international expansion plans, there’s no shortage of business growth opportunities just yet.
If you’re patient with the company, Celsius stock could be a good buy right now because there’s still plenty of room for growth over the long term.
Should you invest $1,000 in Celsius right now?
Before buying Celsius stock, consider the following.
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David Jagielski There are no positions in the stocks mentioned. The Motley Fool has a position at and recommends Celsius. All kinds of idiots Disclosure Policy.
Celsius Holdings is facing its worst year in 10 years. Is this a huge buying opportunity for investors? Originally published by The Motley Fool.
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