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Is Celsius Holdings a buy?

It’s time to break down a popular name. Here is the break down on $CELH, otherwise known as Celsius.

Current Price: $56.44

52/Wk High: $70.66

52/Wk Low: $4.49

Market Cap: $4.1 Billion

Read below for the breakdown!

Celsius Holdings ($CELH) is a global holdings company with ownership of star beverage Celcius, a clinically-proven and patented energy drink that offers a bevy of health benefits.

Celsius has been in business for just thirteen years and the company’s products span four categories and five countries. Categories include Celsius Originals, Celsius Sweetened, Celsius On-The-Go, and Celsius Heat.

The company is led by CEO John Fieldly, who has over 20 years of management experience. Fieldly has been with Celsius since 2012, working his way from CFO to CEO in 2018.

Furthermore, Celsius is available in over 82,000 locations in the US as of Q4 and the company secured additional distribution agreements in the Anheuser-Busch InBev, Keurig, Dr. Pepper, MillerCoors, and PepsiCo networks.

Recently, Celsius has been on fire, rallying a strong 1051% in just the past year. While Celsius has gone on a massive run, the stock itself has been inactionable in the past three-months, moving to the upside just 0.97%.

Digging into the numbers Celsius missed Q4 2020 expectations with an EPS of $0.02, just under the $0.025 analyst’s consensus estimate. On a year-over-year basis, EPS improved by 200%.

Revenues on the other hand impressed, with revenues expanding by 48% to a strong $35.7 million. For reference, the Q4 2019 revenues level was $24.1 million.

Breaking down revenues, the North America segment turned out $28.4 million (up 66% YoY) in revenues while the International segment turned out $7.3 million in revenues (up 7% YoY).

On the margin front, gross margin totaled 48.9% for Q4 2020, representing a strong 700 basis point increase over the Q4 2019 gross margin of 41.9%.

EBITDA improved significantly as well,

jumping 401% year-over-year to a strong $3.0 million. For reference, the Q4 2019 EBITDA level was $0.6 million.

Rounding out the quarter, income totaled $1.7 million, representing a significant improvement over the Q4 2019 income of $-1.2 million.

Shifting into the full year, Celsius reported strong FY 2020 revenues of $130.7 million, representing a strong 74% jump on a year-over-year basis.

Breaking down full year revenues, the North America segment turned out FY 2020 revenues of $95.5 million (up 60% YoY) while the International segment turned out $35.3 million (up 131% YoY) in revenues.

Gross margin improved by 490 basis points in FY 2020, bringing gross margin to a stronger 46.6%. For reference the FY 2019 gross margin level was 41.7%.

EBITDA improved significantly as well in FY 2020, with the year’s EBITDA landing at $15.3 billion, representing 283% improvement.

Rounding out FY 2020 earnings, income totaled $8.5 million for the year, -15% less than the FY 2019 income level of $10 million.

Shifting into the balance sheet the numbers are solid.

Total Debt: $288,000

Total Liabilities: $26.962 Million

Total Assets: $131.290 Million

Cash & Short Term Inv: $43.248 Million

On a valuation basis, Celsius does trade at a premium.

Price to Earnings: 490.78x

Forward Price to Earnings: 209.81x

Price to Sales: 31.05x

Price to Book: 37.88x

Price to Cash Flow: 544.67x

Management has been effective.

Return on Equity: 10.16%

Return on Assets: 7.69%

Return on Invested Capital: 10.11%

Given the numbers the analysts are bullish with a mean price target of $59.42/share, representing a 5.28% upside.

The high price target is $73.00/share, representing a 29.34% gain, while the low price target is $50.00/share, representing a -11.41% downside.

The big money is quite involved as well with 39.06% of Celsius being owned by institutions. Top holders include CD Financial, Arcus Capital Partners, and Nu Horizons Investment Group.

On a technical basis Celsius could be presenting opportunity. According to the six-month charts the MACD recently crossed with downside momentum within a tight range around 1.95.

The six-month charts are also indicating an RSI of 50.07 and CCI of -7.2382, both of which are trending downward.

In short, Celsius ( $CELH ) is a solid long term bet in the beverage space with expanding revenues, a well received product, and a solid management team.


Disclaimer: This is not direct financial advice, simply an opinion based on independent research.

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