Celsius Holdings Inc. (CELH) Is a Trending Stock: Facts to Know Before Betting on It

Celsius Holdings Inc. (CELH) has outperformed the S&P 500 over the past month, but faces mixed earnings estimate revisions. While revenue growth is projected to be strong at +56.3% for the current quarter and +60.2% for the current fiscal year, the company's last reported quarter showed a revenue decrease of -7.4% year-over-year, and EPS estimates have been revised downwards; Zacks currently rates the stock a Hold.

Analysis

Celsius Holdings Inc. (CELH) has demonstrated notable stock performance, returning +10.4% over the past month, outperforming the Zacks S&P 500 composite's +7.2% gain, while its Zacks Food - Miscellaneous industry saw a marginal 0.1% increase. Despite this recent share price appreciation, the company faces headwinds in its earnings outlook. For the current quarter, CELH is expected to post earnings of $0.22 per share, a significant -21.4% year-over-year decline, with the Zacks Consensus Estimate being revised downwards by -20.4% over the last 30 days. While the current fiscal year's consensus earnings estimate of $0.82 still points to a +17.1% year-over-year growth, this estimate has also been revised down by -14.9% in the past month. Similarly, the next fiscal year's EPS estimate of $1.17, though indicating a strong +42.4% growth, has seen a -5.5% downward revision recently. This trend in estimate revisions has contributed to a Zacks Rank #3 (Hold). Contrasting the earnings pressure, revenue forecasts remain robust: sales are projected to grow +56.3% year-over-year to $628.17 million for the current quarter, with full-year estimates indicating +60.2% growth for the current fiscal year ($2.17 billion) and +24.2% for the next ($2.7 billion). However, CELH's last reported quarter showed a revenue decline of -7.4% year-over-year to $329.28 million and an EPS of $0.18, missing consensus estimates by -3.62% and -10% respectively. Valuation also appears stretched, with a Zacks Value Style Score of D, suggesting the stock trades at a premium relative to its peers.

Key Decisions for Investors

• Investors should acknowledge Celsius's strong projected revenue growth but weigh this against the significant recent downward revisions in earnings estimates for the current quarter and fiscal year, alongside a recent earnings and revenue miss.
• Consideration should be given to the stock's premium valuation, as indicated by its Zacks Value Style Score of D, which may temper expectations despite past share price outperformance and strong top-line forecasts.
• The Zacks Rank #3 (Hold) suggests a cautious stance; investors might monitor upcoming earnings reports and any stabilization or reversal in earnings estimate revisions before significantly adjusting positions.