WALL STREET NEWS
CELSIUS HOLDINGS INC
ENERGY / PROTEIN DRINK
From $10 To $155 – Zacks Buy List
These energy drink shares are on fire rising from under $10.00 to over $155 in three years and almost doubling in the past 6 months. These shares are rated outperform by Zacks Research and we would urge all serious traders to add to their BUY LIST
Celsius Holdings Inc engages in the development, marketing, sale, and distribution of functional calorie-burning beverages. It offers flavors including cola, orange, wild berry and lemon iced tea and non-carbonated flavors such as Raspberry Acai Green Tea and Peach Mango Green Tea under the Celsius brand name. The company distributes its products through direct-store-delivery distributors, as well as directly to retailers across various retail segments, including supermarkets, convenience stores…
Celsius Holdings Inc. (CELH) is Attracting Investor Attention: Here is What You Should Know
Celsius Holdings Inc. (CELH) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.
Over the past month, shares of this company have returned +4.7%, compared to the Zacks S&P 500 composite’s +3.2% change. During this period, the Zacks Food – Miscellaneous industry, which Celsius Holdings Inc. falls in, has lost 1.3%. The key question now is: What could be the stock’s future direction?
While media releases or rumors about a substantial change in a company’s business prospects usually make its stock ‘trending’ and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.
Revisions to Earnings Estimates
Here at Zacks, we prioritize appraising the change in the projection of a company’s future earnings over anything else. That’s because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock’s fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.
Celsius Holdings Inc. is expected to post earnings of $0.31 per share for the current quarter, representing a year-over-year change of +158.3%. Over the last 30 days, the Zacks Consensus Estimate has changed -5.3%.
The consensus earnings estimate of $1.43 for the current fiscal year indicates a year-over-year change of +154.4%. This estimate has changed +0.6% over the last 30 days.
For the next fiscal year, the consensus earnings estimate of $2.28 indicates a change of +59.1% from what Celsius Holdings Inc. is expected to report a year ago. Over the past month, the estimate has changed -3.5%.
Having a strong externally audited track record , our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock’s price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates , Celsius Holdings Inc. is rated Zacks Rank #2 (Buy).
The chart below shows the evolution of the company’s forward 12-month consensus EPS estimate:
12 Month EPS
Revenue Growth Forecast
While earnings growth is arguably the most superior indicator of a company’s financial health, nothing happens as such if a business isn’t able to grow its revenues. After all, it’s nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it’s important to know a company’s potential revenue growth.
In the case of Celsius Holdings Inc. the consensus sales estimate of $278.87 million for the current quarter points to a year-over-year change of +81.1%. The $1.11 billion and $1.52 billion estimates for the current and next fiscal years indicate changes of +69.6% and +37%, respectively.
Last Reported Results and Surprise History
Celsius Holdings Inc. reported revenues of $259.94 million in the last reported quarter, representing a year-over-year change of +94.9%. EPS of $0.40 for the same period compares with $0.09 a year ago.
Compared to the Zacks Consensus Estimate of $225.12 million, the reported revenues represent a surprise of +15.47%. The EPS surprise was +81.82%.
Over the last four quarters, Celsius Holdings Inc. surpassed consensus EPS estimates three times. The company topped consensus revenue estimates each time over this period.
No investment decision can be efficient without considering a stock’s valuation. Whether a stock’s current price rightly reflects the intrinsic value of the underlying business and the company’s growth prospects is an essential determinant of its future price performance.
While comparing the current values of a company’s valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S) and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock’s price.
The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an An is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Celsius Holdings Inc. is graded D on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
The facts discussed here and much other information on Zacks.com might help determine whether or not it’s worthwhile paying attention to the market buzz about Celsius Holdings Inc. However, its Zacks Rank #2 does suggest that it may outperform the broader market in the near term.
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