Why Is Celsius (CELH) Stock Rocketing Higher Today
What Happened:
Shares of energy drink company Celsius (NASDAQ:CELH) jumped 14% in the morning session after the company reported fourth-quarter results that blew past analysts' revenue and adjusted EBITDA expectations. Notably, topline growth was strong as revenue grew 95% year on year, driven mostly by North American revenue (up 97% year on year). Management noted that the North American business was led by expansion in distribution points and higher SKUs per location. International revenue also came in strong, up 685% year on year. This was driven by new flavor launches, product availability, and increased velocity. As a result, the gross margin improved significantly (up 110% y/y) and contributed significantly to the EBITDA beat. On the other hand, its EPS narrowly missed analysts' expectations. Zooming out, this was still a decent, albeit mixed, quarter, showing that the company is staying on track.
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What is the market telling us:
Celsius's shares are very volatile and over the last year have had 25 moves greater than 5%. But moves this big are very rare even for Celsius and that is indicating to us that this news had a significant impact on the market's perception of the business.
The biggest move we wrote about over the last year was about a month ago, when the company dropped 7.6% on the news that Bank of America analyst Jonathan Keypour downgraded the stock's rating from Buy to Neutral. The analyst cited the potential for increased competition as the company tries to expand product visibility via shelf expansion. He added, "We still see strong sales and EBITDA potential, but wait for stronger velocity to signal a resumption of momentum in market share gains."
Celsius is up 36.9% since the beginning of the year.Investors who bought $1,000 worth of Celsius's shares 5 years ago would now be looking at an investment worth $68,081.
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