Celsius Holdings Stock Before Q1 Earnings: To Buy or Not to Buy?

Celsius Holdings, Inc. CELH is likely to register a top and bottom-line decline when it reports first-quarter 2025 earnings on May 6.

The Zacks Consensus Estimate for revenues is pegged at $341.7 million, which indicates almost a 4% decrease from the year-ago period's level.

Although the consensus mark for quarterly earnings has moved up a penny in the past 30 days to 20 cents per share, the projection indicates a 25.9% decrease from the year-ago quarter’s figure. CELH has a trailing four-quarter negative earnings surprise of 4%, on average. (Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.)

Celsius Holdings Inc. Price and EPS Surprise

Celsius Holdings Inc. price-eps-surprise | Celsius Holdings Inc. Quote

What the Zacks Model Predicts About CELH’s Q1 Earnings

As investors prepare for Celsius Holdings’ first-quarter announcement, the question looms regarding earnings beat or miss. Our proven model predicts an earnings beat is likely for CELH this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here. You can see the complete list of today’s Zacks #1 Rank stocks here.

Celsius Holdings has an Earnings ESP of +2.91% and carries a Zacks Rank #3 at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

What’s Shaping Celsius Holdings’ Q1 Earnings?

Celsius Holdings faces several headwinds that could impact its first-quarter 2025 earnings. Rising operational costs — due to higher raw material prices, elevated freight expenses and persistent inflationary pressures — pose a threat to profit margins and might hinder the company's ability to sustain growth.

In addition, the competitive landscape in the energy drink market remains intense. While CELH is actively expanding its retail footprint, maintaining this growth demands consistent spending on marketing, innovation and distribution. Moreover, during its last earnings call, management signaled potential softness in first-quarter results, citing difficult year-over-year comparisons due to the prior launch of the successful Essentials line and strong innovation in the same period last year.

Despite ongoing challenges, Celsius Holdings continues to demonstrate resilience through innovation and strategic product development. The company remains focused on launching new offerings that align with changing consumer preferences, helping it stay relevant.

CELH Surges Ahead, Leads the Pack

Celsius Holdings has witnessed an impressive surge in its stock price over the past three months. The stock has rallied 46.8%, outpacing the Zacks Food - Miscellaneous industry’s growth of 1.4%.

CELH Price Performance

The company has also outpaced key competitors: Monster Beverage Corporation MNST, The Coca-Cola Company KO and PepsiCo, Inc. PEP. Shares of Monster Beverage and Coca-Cola have gained 25.3% and 12.6%, respectively, while PepsiCo’s shares have declined 11.1% in the past three months.

Is Celsius Holdings Overvalued?

CELH appears overvalued from the price-to-earnings perspective. The stock is currently trading at a forward 12-month P/E ratio of 31.94, exceeding the industry average of 16.20 as well as the S&P 500’s 20.56. This elevated valuation raises concerns about the stock’s long-term sustainability and may indicate potential downside risk.

When compared to major beverage competitors, Celsius Holdings is also trading at a premium. For reference, Coca-Cola holds a forward P/E of 23.48, Monster Beverage stands at 31.22, and PepsiCo comes in at 16.15. In addition, Celsius Holdings has received a Value Score of D, suggesting it may not appeal to value-focused investors.

Investment Thesis for CELH Stock

While Celsius Holdings has demonstrated strong stock performance and momentum ahead of its first-quarter earnings, concerns around valuation and expected declines in both revenues and earnings suggest caution. Trading at a premium P/E multiple compared to industry peers, CELH appears overvalued, limiting its appeal for value investors. However, its solid market presence, positive earnings ESP and relative strength in the beverage sector support maintaining a position. As a result, existing shareholders may consider holding their positions, while prospective investors may want to wait for a more attractive entry point.

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

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