Is It Time to Buy Celsius Stock as Alani Nu Reinvigorates Growth?

Last May, I predicted that a turnaround could be near for Celsius (NASDAQ: CELH) following its acquisition of Alani Nu.

With Alani helping drive growth, the stock has now more than doubled over the past year and just reported strong earnings results that led to a double upgrade from Bank of America, which took its rating from "underperform" to "buy."

Let's take a look at its recent results to see if the stock's momentum might continue.

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Alani Nu once again fuels results

Alani Nu once again helped fuel Celsius' growth, with pro forma revenue surging 136% to $370 million. It also saw $45 million in sales from its recently acquired Rockstar brand, with another $6 million sales classified as other income. Celsius brand revenue, meanwhile, fell 7.7%, as the brand dealt with inventory timing.

Overall, company sales soared 117% to $721.6 million. Meanwhile, retail sales increased by 24.4%. Celsius brand retail sales were up 12.8%, while Alani Nu retail sales surged 76.9%. Rockstar's retail sales fell by 10.3%.

Sales in North America climbed 124% to $699.5 million. International sales, meanwhile, rose 9% to $22.1 million. The company is currently in 10 international markets and will look to expand its international presence.

Turning to profitability, adjusted earnings per share (EPS) jumped 86% to $0.26, while adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) climbed 113% to $134.1 million.

Looking ahead, Celsius expects its margins to improve with gross margins settling in the low-50% range after it fully integrates Alani and Rockstar. The company expects significant shelf space gains for both Alani and its Celsius brand, with much of it coming in the spring. It is also launching a non-carbonated line.

Is the stock still a buy?

The best time to buy a stock like Celsius is when it is seeing strong distribution gains. Alani saw a big jump throughout the year, but should have some more room as it transitions its distribution over to PepsiCo. Meanwhile, both the Alani and the Celsius brand will see shelf space gains this year.

Looking at valuation, the stock now trades at a forward price-to-earnings ratio (P/E) of around 34 times 2026 analyst estimates. That's reasonable given its growth, and I think investors can own Celsius over the next year. However, once the distribution gains are largely complete, growth slows and valuation multiples tend to shrink, so don't overstay your welcome in the stock.

Bank of America is an advertising partner of Motley Fool Money. Geoffrey Seiler has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Celsius. The Motley Fool has a disclosure policy.