1 Growth Stock Down 30% to Buy Right Now

Celsius Holdings (CELH) reported a 173% Q3 revenue surge, primarily driven by acquisitions like Alani Nu, yet its stock declined significantly following a reported $61 million net loss. However, this loss was attributed to one-time charges, with adjusted earnings per share doubling year-over-year, supported by 13% organic sales growth for its core brand and strong performance from Alani Nu, which anticipates further acceleration with PepsiCo distribution. Despite recent market underperformance, the company's underlying profit expansion, ongoing growth initiatives, and a valuation of approximately 5x sales present a potentially undervalued opportunity for long-term investors.

Analysis

Celsius Holdings (CELH) reported a robust 173% Q3 revenue growth, significantly boosted by acquisitions, notably Alani Nu which contributed $332 million. Despite this top-line expansion, the stock has seen a substantial decline, down 30% from its late October 2025 high and over 50% from its 2024 all-time high, largely due to a reported $61 million Q3 net loss. This underperformance contrasts sharply with the underlying business momentum.

The reported $61 million net loss was primarily driven by one-time charges associated with integrating Alani Nu's distribution into PepsiCo's network. Excluding these non-recurring items, Celsius achieved $1.10 per share through Q3 2025, effectively doubling its earnings from the comparable prior-year period, indicating genuine profit expansion. Organic growth for the core Celsius brand also remained strong, with scanner data showing a 13% sales increase in Q3.

Gross margins improved to 51% in Q3 from 46% year-over-year, reflecting enhanced operational efficiency. Furthermore, Alani Nu sales doubled year-over-year and are poised for accelerated growth with PepsiCo distribution commencing in December, complementing 30% international revenue growth for the Celsius brand. Trading at approximately 5 times sales, well below its five-year average, CELH appears undervalued given its adjusted profit trajectory and strategic growth initiatives.

Key Decisions for Investors

• Investors should evaluate CELH's underlying profitability by adjusting for one-time charges, as the reported $61 million net loss obscures significant adjusted earnings growth.
• Monitor the integration and distribution ramp-up of Alani Nu through PepsiCo's network, as this is a key driver for accelerated future revenue and market share expansion.
• Consider the current valuation of approximately 5 times sales as potentially attractive for long-term positions, given the company's strong organic growth, margin expansion, and international opportunities.