Celcius - is it hot in here (ok - not a dad joke thread)

CELH is not new to TMF or to Saul board, and has been mentioned here.
Doesn’t look like I ever gave it a separate thread, so starting one here.

Stock recently split from approx $150 to $50. Been hovering just under/over, but popped a bit in past couple days.

I had mentioned in a previous thread that I wasn’t yet sold on the taste. I “experimented” with it starting in Summer during my vacation. I am a decade-plus addict to Monster Zero and/or Monster Rehab drinks. I usually have 2 per day, one in the morning and then around lunch. Try not to drink later than that, or the caffeine can affect my sleep. I am not a coffee drinker…this is my coffee vice.

Anyway, there are two basic groups of Celcius that I see at Costco:

I have been drinking the latter since Summer. Basically I start with Celcius in morning, and have my Monster Zero at lunch.

This week I finally bought the former group to try them out, as I realized I didn’t have any desire to stop drinking the Celcius. I had hesitated because one of the flavors is Peach and I am generally not a Peach fan, but this flavor is fine.

So I can say there are 6 flavors, and while the berry and Artic and Orange are my favorites, they are all solid. I do like multiple Monster Zero flavors, but they unfortunately don’t do variety packs of the flavors I like, so I generally stick with the main version (white/silver can).

Monster cans are a bit bigger, but Celcius is also slightly cheaper, so it is a wash.

The Saul board has talked the metrics so no point in rehashing it all here, but main point is they are now lapping the Pepsi agreement which turbo boosted their sales, and so now you can start eye-balling what “real” sustainable growth might be moving forward, as they grow with shelf space and international expansion, etc… I think 38% is forecasted growth while others are calling 50%. That feels like the TTD/MDB/AYX in 2018 kind of vibe. Unclear how long a non-tech stock can mimic growth rates, but Monster obviously did it for a long time successfully.

Point of this post was to say that I can validate the quality of the product now. It is a “sharper” taste which makes the Monster taste “sweeter” is the only way I can describe it. Both good, but different.

I was never a huge Red Bull fan. Always a bit too medicine-y for my taste, and they have thrived based on their marketing, imo.

Can I name a 4th player? Rockstar was good in a pinch when I traveled for work and couldn’t find my Monster. But I think the point is that marketing and distribution play a huge role, otherwise why/how Red Bull is so dominant is beyond me.

So I think Celcius has a very real shot at being a solid #3 player, and if years down the road either Monster or Red Bull stumbles, maybe they can advance further. How many brands does a grocery store need to carry? Well - they carry a lot of soda brands, despite the dominance of Coke/Pepsi. So having competition isn’t necessarily the problem…the challenge is distancing yourself into a top tier and away from also-rans, so that you command more shelf space and better placement, more usage in places where vending machines may be. Can you get sold (like Red Bull) at bars. Part of Red Bull simplicity is their main product is obvious vs other flavors. So while I personally like multiple flavors that Monster and Celsius produce, their lack of an obvious flagship flavor might word against them a bit for bars…not sure.

All this to say, I am a buyer on any meaningful dip.
What price? I am not sure I will know it until I see it, but simply seeing $49 isn’t really meaningful. But maybe I do a starter and average down if/when it has a bigger correction.

Stocks don’t have to follow analogies or paths of similar stocks in the past, but from what I can see, it does appear CELH is more highly valued at this stage in their revenue than MNST was, so I don’t consider a small dip from here a “cheap” buy.

CELH has been on the watchlist for a while now, and I dabbled in it briefly a few months back. Just feels, personally, a bit more solid now. Let’s see if the stock price plays ball in 2024.

Dreamer

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Personally I do not like energy drinks. I did try Celsius to see what it was all about. The flavors were good but I didn’t like how sweet they were. I like black coffee and waterloo carbonated drinks. I am still in Celsius because I do like their growth and also I do like their tie in with Pepsi. They have traded in a P/S of 7.04 to 44.72, but are trading at 11.51 right now I think that is not a bad level. Since splitting they have been trading sideways.

Andy

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Mstar gives CELH a fair market value of $33.

I give more credence to their analysis and valuation framework, because it is based on quarterly reports and does not change just because the stock price moves higher or lower.

Mstar actually lowered their fair market value after the Q3 earnings report was published.

Imo, CELH is good for a swing trade as insider selling pressure will abate soon. Feels a lot like when Musk was selling TSLA shares to buy Twitter. Once that selling pressure abated, the stock price moved up and down more freely.

Good luck to the longs.

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Hi BeachMan. Do you think Mstar has a problem valuing high growth companies?

Andy

I think MStar has the best valuation approach for US equity, period.

no FOMO, no froth, no fintwit pump and dump…

They have a diverse talented group of analysts that have industry specific expertise…semis, cloud, cybersecurity, social media etc…you name it they have it.

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Well researched, Dreamer. I have been doing the same.
I’ll add a couple of things. Outside of the Costco multi-packs, they also have some other Sparkling flavors like Watermelon and Fuji Apple Pear. We recently tried the Peach Mango Green Tea (non sparklinkg) which was good. They also have powdered packs to mix with water.
While trying to source the product at my local Grocery Store (HEB), it was interesting to note that it was in the vitamin section of the Store and not on shelves with other ‘energy’ drinks. I think that is both good and bad.
I’ve purchased a few shares to make me keep an eye on it.

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I’m evaluating Zacks as a investment service and they focus on earnings estimate growth as a indicator of good investments.

They beat earnings the last 3 quarters

Currently analysts predict CELH to show growth the next 3 quarters but a tick down in Q4 2024 then growing after that.

Interestingly the average of all analysts PT is $116

I did pick up some shares at 48.xx on a limit trade. No sure if I’ll add more yet

Blame this as a lack of research on my part…but i didnt realize Rockstar was owned by Pepsi.

Not sure how I feel about this.
Guess i was partly hoping for Pepsi buyout, but at already $13b mkt cap, dont see this as likely.

All boils down to this idea that celcius resonates w younger crowd (apparently) although i wouldnt think Rockstar is a terribly old brand.

It does all come down to marketing, or red bull would be an also-ran.

Thoughts…this bug anyone else?

Dreamer

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Here’s a buying opportunity. B of A goes from Buy to Hold, suggesting the Pepsi surge is now complete.
Personally, I’m adding. Sure, the volume created by adding hundreds of locations is a good short term catalyst. And if the product wasn’t any good, then that would be it. My expectation is that new customers will find the product now that it has wider distribution and tell 3 friends about it.
I guess that’s what makes a market.

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My thoughts exactly, I was going to post the same thing, have been looking to increase my CELH holdings and this looks like a good opportunity to add another batch. BofA downgrade has moved the stock down way too much IMO, especially when considering their rationale.

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The benefit of hindsight. Buying on Jan 19th turned out to be a good idea. I’m staying long. I hope the International rollout goes well (is hope a strategy?)

Btw - the BofA analyst kept his HOLD rating after earnings this week but raised PT to $80

Keypour has an average return of 1.0% when recommending Celsius Holdings.

According to TipRanks.com, Keypour is ranked #3462 out of 8824 analysts

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I was a genius for buying around $50 and selling around $64…ha.

Oh well.
Buyer again in the $50s, if it ever gets there again.

Dreamer

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CELH gave up the gains of the day, probably has been heavily shorted for the last couple of hours, might close in the red.
It might get back in the 50s though, in 1-2 years after a split.

Have a good weekend!

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