PEP vs. CELH: Which Beverage Stock Is the Better Bet Now?

With consumers rapidly shifting toward healthier, performance-oriented drinks, PepsiCo, Inc. PEP and Celsius Holdings, Inc. CELH have emerged as two highly relevant names to watch. 

PepsiCo, a global staple with a market cap of about $200 billion, spans everything from classic soft drinks and sports hydration to teas, coffees and salty snacks, giving it unmatched breadth across beverage and convenient-food categories. Celsius Holdings, currently valued at around $10.4 billion, has become one of the fastest-growing players in the performance-energy space, powered by its clean-label, fitness-driven CELSIUS lineup that resonates strongly with today’s health-forward consumers.

Despite their vast difference in size, both companies are helping shape the next phase of beverage innovation — one through scale and product diversity, the other through focused disruption. Together, they create a compelling face-off for investors.

The Case for PEP

PepsiCo gets its appeal from the consistency of its growth engine, the breadth of its global portfolio and its disciplined operating model. The company continues to post steady top-line gains, supported by improving beverage momentum and stabilizing trends across convenient foods. Its international operations remain a bright spot, posting mid-single-digit organic growth for more than four years — a sign of brand strength, solid pricing and a well-balanced global footprint.

Another advantage is PepsiCo’s reach across so many everyday categories. From soft drinks and sports hydration to functional beverages, ready-to-drink coffee and salty snacks, the company has multiple ways to capture consumer demand. It’s also leaning harder into innovation, building out zero-sugar options, permissible snacks, prebiotic drinks and protein-forward beverages that fit today’s shift toward wellness and performance.

Execution in North America continues to improve, supported by stronger supply-chain performance, increased marketing and more targeted category strategies. PepsiCo’s broad productivity program — covering automation, SKU simplification, procurement efficiencies and a more streamlined operating structure — is helping rebuild margins while creating room for further reinvestment.

While elevated input costs, tariffs and softness in select packaged food categories remain challenges, the company’s scale, diversified mix and cost discipline help cushion these pressures. With renewed strength in beverages and a healthy innovation pipeline, PepsiCo remains well-positioned to deliver consistent, broad-based growth in the years ahead.

The Case for CELH

Celsius Holdings continues to be one of the fastest-growing names in functional beverages, and its latest quarter shows just how quickly the brand is expanding. Revenues jumped 173% year over year in the third quarter of 2025, thanks to strong momentum across Celsius, Alani Nu and the recently added Rockstar Energy, giving the company a wider reach across fitness-focused and lifestyle-driven consumers. The combined portfolio now holds more than 20% share of the U.S. energy drink market. 

A big part of CELH’s acceleration comes from its expanding partnership with PepsiCo. The company now serves as PepsiCo’s U.S. Strategic Energy Drink Captain, giving it greater influence over shelving, promotions and distribution. Starting December 2025, Alani Nu will move into Pepsi’s DSD network, which should significantly boost distribution and shelf space as retailers reset early next year. However, this transition comes with short-term challenges, including distributor termination costs and some inventory disruption. 

Celsius Holdings’ margins remain healthy, supported by a better product mix, improving cost efficiency and stronger leverage on raw materials, though tariffs and integration-related expenses continue to create near-term pressure. Nonetheless, operational discipline is evident, with well-managed G&A and constant efficiency efforts.

The company is also building momentum internationally, with strong early traction in Australia and steady gains in Europe. With a strong balance sheet, rising brand awareness, an expanding portfolio and a robust pipeline of innovation, Celsius Holdings heads into 2026 with solid momentum and plenty of room to grow.

How Does the Zacks Consensus Estimate Compare for PEP & CELH?

The Zacks Consensus Estimate for PepsiCo’s current fiscal-year sales suggests a year-over-year increase of 1.8%, while the consensus mark for earnings calls for a decline of 0.7%. The consensus estimate for EPS for the current fiscal year has dropped by a penny to $8.10 over the past 30 days.
 

The Zacks Consensus Estimate for Celsius Holdings’ current fiscal-year sales and EPS implies year-over-year growth of about 80% each. The consensus estimate for EPS for the current fiscal year has risen by 11.5% to $1.26 over the past 30 days.

PEP & CELH: A Look at Past-Year Stock Performance

Over the past year, shares of PepsiCo have tumbled 9.9% compared to Celsius Holdings’ increase of 46.4%. CELH’s strong outperformance reflects investors’ confidence in its ability to capture share within the rapidly growing energy-drink category, driven by innovation and strong consumer engagement. While the stock carries more volatility than a mature company like PepsiCo, its growth trajectory, category tailwinds and expanding distribution footprint support its long-term potential.

PEP vs. CELH: A Peek Into Stock Valuation

PepsiCo’s forward P/E of 17.12 sits just below its median of 17.2, suggesting the stock is fairly valued for a stable, mature business. Celsius Holdings’ forward 12-month P/E of 27.08 is also below its one-year median of 35.83, indicating the stock is trading at a relative discount to its recent growth-driven valuation. 

While CELH still carries a higher multiple because of its faster growth profile, it also comes with more variability in performance. PepsiCo, with its steadier earnings and more predictable outlook, offers a stronger risk-adjusted setup at current levels, making PEP a better choice on valuation grounds.

PEP vs. CELH: Which Is the Better Bet Now?

Both PepsiCo and Celsius Holdings bring meaningful strengths to the table — CELH with its explosive growth and rising influence in the energy-drink world, and PEP with its robust portfolio, global reach and reliable execution. Celsius Holdings has the momentum, but it also comes with more ups and downs as it continues scaling and integrating new brands. PepsiCo, on the other hand, offers steadier performance, broader category strength and a clearer path for consistent long-term growth. When weighing growth potential against stability and predictability, PepsiCo appears to be the better bet right now.

PEP has a Zacks Rank #2 (Buy), whereas CELH 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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