Celsius Holdings (CELH 12.49%) stock had a great day Thursday, rising 11.5% by 10:05 a.m. ET on two positive notes from Wall Street analysts.
Piper Sandler yesterday released research supporting the continued popularity of Celsius among teenage energy drink consumers. Separately, Stifel reported this morning at the National Association of Convenience Stores trade show, which reported strong sales trends in that market segment.
Second good news for Celsius
CNBC reported the Piper news this morning, noting that Celsior has a 35% market share among energy drink brands preferred by teenagers. In fact, it’s pretty surprising. In the overall market, according to the 2023 Statista study, Celsius scores in just single digits, with Red Bull and Monster Beverage (MNST 1.26%) dominating this market, with market shares of nearly 40% and 30%, respectively. It was.
Although the two studies target different markets, Celsius’ growing popularity among younger generations suggests that Celsius’ overall market share will grow as these teenagers age. I’m doing it. Meanwhile, Stifel’s report shows “overall improving sales trends” for energy drinks sold in convenience stores, which will account for 62% of all energy drink sales in 2024.
Is Celsius stock worth buying?
How to capture a bigger share of a growing market? This could be a pretty bullish sign for Celsius stock. However, this leaves an issue with evaluation. Growth prospects aside, is Celsius stock cheap enough to buy?
You might not think so if the current rate of return is 30x. But the situation described by these two analyst reports suggests that Celsius is poised to enjoy (if you’ll pardon the terminology) monster growth in the coming years. In fact, Wall Street expects Celsius’ reported earnings to more than triple over the next five years, from $0.77 in 2023 to $2.74 in 2028, based on analyst forecasts collected by S&P Global Market Intelligence. Masu.
This amounts to an annual growth rate of nearly 29%, which is roughly in line with the price-to-earnings ratio. To me, this seems like fast enough growth for Celsius stock to be bought.
Rich Smith has no position in any stocks mentioned. The Motley Fool has a position in and recommends Celsior and Monster Beverages. The Motley Fool has a disclosure policy.
