Assessing Celsius Holdings (CELH) Valuation After Strong Sales But Weaker Profitability

Simply Wall St.03-12 09:33

AdvertisementWhat Celsius’s latest earnings and buyback tell you Celsius Holdings (CELH) reported fourth quarter and full year 2025 results that combined strong sales with pressure on profitability, ...

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The company posted net income of US$24.74 million for the quarter, after reporting...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":["earning"],"viewcount":null,"language":"en","relate_stocks":{"CELH":"Celsius Holdings, Inc."},"translate_title":"在销售强劲但盈利能力较弱后评估摄氏度控股(CELH)的估值","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"CELH":1.5},"content_text":"AdvertisementWhat Celsius’s latest earnings and buyback tell you Celsius Holdings (CELH) reported fourth quarter and full year 2025 results that combined strong sales with pressure on profitability, alongside a completed share repurchase program that modestly reduced the share count. For the fourth quarter of 2025, Celsius reported sales of US$721.63 million compared with US$332.2 million in the same period a year earlier. The company posted net income of US$24.74 million for the quarter, after reporting a net loss of US$18.88 million in the prior year period. Basic earnings per share from continuing operations were US$0.04 for the quarter, versus a basic loss per share from continuing operations of US$0.10 a year earlier. Diluted earnings per share from continuing operations were also US$0.04, compared with a diluted loss per share from continuing operations of US$0.11 in the same quarter of 2024. Looking at the full year to 31 December 2025, Celsius reported sales of US$2.52b compared with US$1.36b a year earlier. Net income for the year was US$108 million, compared with US$145.07 million in the previous year, reflecting the pressure from rising expenses and declining operating margins highlighted by management. Full year basic earnings per share from continuing operations were US$0.25, compared with US$0.46 a year earlier. On a diluted basis, earnings per share from continuing operations were US$0.25, versus US$0.45 in the prior year. Alongside these results, Celsius updated investors on its previously announced share repurchase activity. From 10 November 2025 to 31 December 2025, the company bought back 932,519 shares for US$39.8 million, representing about 0.36% of the outstanding shares. This tranche completes the buyback that was announced on 10 November 2025. For you as an investor, the combination of higher sales, lower full year net income and a relatively small completed buyback points to a company that is still investing heavily in growth while facing tighter margins, with capital returns playing a secondary role for now. See our latest analysis for Celsius Holdings. At a share price of US$45.72, Celsius has had a mixed run recently, with a 4.35% decline in its 30 day share price return but a 4.03% gain over 90 days and a 66.31% 1 year total shareholder return that reflects how investors have reacted over time to the company’s rapid sales growth, lower recent profitability and updates such as the Alani Nu acquisition, the PepsiCo distribution agreement and the latest earnings and buyback announcement. If this earnings report has you thinking about where growth stories can go next, it can be useful to look beyond beverages and see what is happening across 20 top founder-led companies as another potential hunting ground for interesting businesses. With Celsius shares at US$45.72, a value score of 3 and the stock trading at roughly a 48% discount to one intrinsic estimate and to analyst targets, is this an opening or is the market already pricing in future growth? Most Popular Narrative: 17.5% Undervalued At a last close of US$45.72 versus a narrative fair value of US$55.43, the most followed view on Celsius points to a sizeable valuation gap that rests on a detailed story of category expansion, distribution reach and brand consolidation.  A 17-Year Story That Most Investors Only Discovered in the Last Three. In 2010, Celsius Holdings (CELH) was generating roughly US$5 million in annual revenue, a forgotten energy drink with niche distribution in Scandinavian gyms and a handful of US health food stores. By the end of 2025, the company had crossed US$2 billion in trailing twelve-month revenue and acquired two major energy drink brands. It secured PepsiCo as both its primary distributor and an 11% equity holder. Most retail investors only discovered this stock near the peak in 2023. The ones who understood what actually happened in 2024 and why the crash was a channel inventory problem, not a brand problem, had the best entry point in a decade.  Read the complete narrative. Curious what underpins that fair value gap? This narrative leans heavily on continued category share gains, higher long term margins and a future earnings multiple usually reserved for much larger consumer brands. The full breakdown lays out how those assumptions interact and what has to go right for US$55.43 to make sense. Result: Fair Value of $55.43 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, this story can change quickly if Alani Nu’s growth slows after the distribution shift or if Rockstar reduces group margins below management’s comfort zone. Find out about the key risks to this Celsius Holdings narrative. Another angle on Celsius’s valuation The user narrative leans on a fair value of US$55.43, suggesting Celsius looks undervalued. Our price to sales check tells a different story. At 4.7x sales, the shares are priced well above the US beverage industry at 2x, peers at 2.4x and an estimated fair ratio of 3.1x. That gap could either close through business progress or a lower share price. Which outcome do you think is more likely over your time horizon? See what the numbers say about this price — find out in our valuation breakdown. NasdaqCM:CELH P/S Ratio as at Mar 2026Next Steps If this mix of strengths and pressure points feels finely balanced, it is worth moving quickly and testing the figures against your own expectations, then weighing 3 key rewards and 2 important warning signs to see how those risks and rewards stack up for you. Looking for more investment ideas? If you stop with just one stock, you risk missing out on opportunities that better match your goals, risk tolerance and time horizon, so keep widening your search.  Start with quality by checking companies on our solid balance sheet and fundamentals stocks screener (41 results), where strong fundamentals and resilient finances take center stage. Hunt for potential bargains using the 50 high quality undervalued stocks, built to surface companies that pair healthy balance sheets with pricing that may not fully reflect their fundamentals. Focus on income and staying power through the 14 dividend fortresses, highlighting 5%+ dividend yield fortresses for investors who want cash returns alongside stability.   This article by Simply Wall St is general in nature. We provide commentary based on historical data\n    and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your\n    financial situation. We aim to bring you long-term focused analysis driven by fundamental data.\n    Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.\n    Simply Wall St has no position in any stocks mentioned.New: AI Stock Screener & AlertsOur new AI Stock Screener scans the market every day to uncover opportunities.• Dividend Powerhouses (3%+ Yield)• Undervalued Small Caps with Insider Buying• High growth Tech and AI CompaniesOr build your own from over 50 metrics.Explore Now for FreeHave feedback on this article? Concerned about the content? Get in touch with us directly. 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