Stone Fox Capital
Founder, CIO & Portfolio Manager of Stone Fox Capital
Celsius' outgoing COO managed to cut Celsius brand volume 18% through SKU rationalization. Per @BevInsights citing NielsenIQ, Celsius Holdings energy drink volume fell 0.2% in the four weeks to August 22 on a 9.7% average price gain, as Celsius brand family volume dropped 18.1% while Alani Nu rose 33%. x.comÂ
Celsius's core brand is shrinking and further distribution gains look limited, making it a worse bet than DoorDash. Q2 revenue of $817.9M and adjusted EPS of 36c missed estimates, and organic growth excluding Rockstar was just 2% versus 9% expected, as brand Celsius fell 12% while Alani Nu grew 22%. Management offered little sign of a turnaround, and with the PepsiCo deal four years old, new c-store gains are likely limited. Celsius manages at best 5% organic growth at 16x 2026 earnings. x.comÂ
Celsius looks unattractive because its moats are thin and it does not control the supply chain that matters for its business. Q2 adjusted EBITDA fell 32% year over year and the stock is down 32% to a 52-week low since its Alani Nu acquisition rally. A better P/E would be needed to make it interesting. x.com x.comÂ
Celsius's Energy+ Hydration line can broaden demand by serving people seeking a noncarbonated drink, but customer switching and manufacturing and freight costs limit what it adds. In the 2027 forecast, 35% of $75M in line sales replaces existing Celsius purchases, leaving about $49M in additional revenue and $19M in gross profit after new production costs and avoided costs on displaced products, before marketing and overhead. The test is how much the line adds to the whole franchise. x.comÂ
Celsius carries too much risk despite significant insider buying. Bloom's scanner data, clear shelf-space gains and social momentum challenge Celsius, and freight is a headwind. Alani limited editions are doing well and accelerating slightly, but the core Celsius brand has no acceleration potential until Q1. x.comÂ
Celsius increasingly looks like a mature beverage business rather than a hypergrowth story, after a big miss on earnings and revenue. Sales grew just 10%, with growth expected around that level next year, and it is unclear whether this is temporary execution weakness or genuine brand deterioration. At 14x EPS the stock looks cheap, but arguably deserves to until growth stabilizes and reaccelerates. x.comÂ
Celsius Holdings looks attractive as its operating metrics move in the right direction while the share price moves toward value territory. x.comÂ
Celsius bulls are missing that the drink tastes terrible and the brand has far too many flavors. That product weakness comes as Celsius posted an ugly miss, a reminder that a stock at 12x 2027 earnings can always get cheaper. x.comÂ
Celsius's repeated promotions may lift revenue and trial without building durable demand once the sale ends. The brand appears to be positioning itself as a value brand, and with most flavors not that good, it is hit or miss whether new buyers find one they keep buying. x.com x.comÂ
Celsius is tracking in line with management's projections, and Alani Nu is becoming surprisingly strong, setting up a great 2027 for shareholders. Per NielsenIQ data for the four weeks to September 19, Celsius Holdings' energy drink volume rose 9.8% with a 6.6% average price gain; the Celsius brand family fell 20% while Alani Nu rose 74.3% despite a 4% average price cut. x.comÂ
Celsius has zero moat and looks like dead money. Price swings from $1.25 to $2.99 a can can drive deal-minded customers away, and copycats are getting into Kroger with ease. A reply argues distribution protects it, since rivals lack shelf space in the Coke, Pepsi and Keurig Dr Pepper systems, but that doesn't change the view. x.com x.com x.comÂ
