Does Celsius Holdings' Buyback Plan Signal Stronger Growth Ahead?

Celsius Holdings, Inc. CELH recently announced a new $300 million share repurchase authorization, signaling strong confidence in its financial position and long-term fundamentals. The company noted that solid cash generation and a healthy balance sheet give it sufficient flexibility to make share repurchases while continuing to invest in its multi-brand energy portfolio.

The announcement follows a robust third-quarter 2025 show, in which revenues surged 173% year over year, driven by the Alani Nu and Rockstar acquisitions and continued growth in the Celsius brand. CELH ended the quarter with nearly $806 million in cash, supported by strong operating cash flow and a healthy liquidity position despite an active acquisition year. Gross margin expanded 530 basis points to 51.3%, providing additional internal funding capacity.

Balance-sheet flexibility also improved. Following quarter-end, CELH reduced debt by $200 million, lowering total debt to about $700 million and cutting its term loan rate by 75 basis points, which is expected to reduce annual interest expense by about $20 million starting in 2026.

While the fourth quarter of 2025 is expected to be uneven due to the timing of Alani Nu’s transition into PepsiCo, Inc.’s PEP DSD network, CELH’s underlying performance remains healthy. Against this backdrop of strong cash reserves, expanding margins and ongoing debt reduction, Celsius Holdings’ decision to authorize a $300 million buyback reflects confidence in its long-term earnings trajectory and its ability to balance growth investments with shareholder returns.

How PEP & MNST’s Buybacks Signal Strength

PepsiCo expects to return nearly $8.6 billion to its shareholders in 2025, through share buybacks of $1.0 billion and dividends of $7.6 billion, per its third-quarter earnings release. This underscores that buybacks are a deliberate part of the company’s capital allocation, courtesy of its healthy liquidity position. PepsiCo’s net cash from operating activities amounted to $5,468 million for the 36 weeks ended Sept. 6, 2025.

Monster Beverage MNST delivered a strong third quarter, with net sales rising 16.8% to $2.20 billion and net income growing 41.4% to $524.5 million. While the company did not repurchase any shares during the quarter, it has approximately $500 million remaining under its authorized buyback program. Monster Beverage’s healthy financial status leaves ample room for share repurchases.

CELH Stock’s Price Performance, Valuation & Estimates

Shares of Celsius Holdings have rallied 56.4% year to date against the industry’s decline of 14.7%.

CELH’s Price Performance Versus Industry

From a valuation standpoint, CELH trades at a forward price-to-earnings ratio of 27.68, much higher than the industry’s average of 14.5.

CELH’s Valuation Compared to Industry

The Zacks Consensus Estimate for CELH’s 2025 and 2026 earnings implies year-over-year growth of 80% and 20.7%, respectively.

Celsius Holdings currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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