Celsius Shares Soar. Is It Too Late to Buy the Stock?

Key Points

• Celsius delivered strong Q2 results, led by Alani Nu.

• The Alani Nu brand is seeing strong momentum, particularly with popular LTOs.

• However, after the big gains, the stock is no longer in the bargain bin.

• 10 stocks we like better than Celsius ›

In May, I predicted that a turnaround could be near for Celsius (NASDAQ: CELH), and the company delivered when it recently reported its second-quarter results. The stock shot higher and has now nearly doubled on the year, as of this writing.

The question now, though, is: Can the stock keep its momentum going, or is it too late to buy the stock? Let's take a closer look at the company's recent results and prospects to find out.

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Alani Nu powers results

The biggest reason why I thought a Celsius turnaround was around the corner was due to its acquisition of rival energy drink maker Alani Nu.

Alani Nu had been growing quickly, and that continued in Q2, with the brand's retail sales soaring 129%. Its market share, meanwhile, nearly doubled year over year to 6.3% for the 13 weeks ended June 29, a 3.1-point year-over-year gain. The company credited the strong growth to popular limited-time offerings (LTOs), including Sherbet Swirl and Cotton Candy flavors.

The Celsius brand was also solid, with revenue growing 9% to $438.1 million and unit sales up 6%. Retail sales increased 3% year over year, but were up 17.6% sequentially. It held an 11% dollar share in the energy drink category, down 130 basis points year over year. For its part, the Celsius brand will launch its first LTO flavors this fall.

Overall company sales climbed 84% to $739.3 million, soaring past analyst expectations for revenue of $655.7 million. Meanwhile, retail sales grew 29% and volume increased 31%.

North America sales jumped 87% to $714.5 million, due largely to the addition of Alani Nu. International sales, meanwhile, climbed 27% to $24.8 million, with Celsius seeing strong growth in Australia, the U.K., and France. The company said it is seeing the same fitness trends in international markets as it is in North America, with more females beginning to consume energy drinks.

Profitability was also strong, with adjusted earnings per share (EPS) soaring 68% to $0.47, well ahead of the $0.21 analyst consensus. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), meanwhile, surged 109% to $220.3 million.

Looking ahead, the company expects some margin pressure in the latter half of 2025 due to higher input costs, largely stemming from aluminum tariffs. It will also increase its marketing efforts to help increase brand awareness. This will include its "Lift.Fit.Go" campaign, and having its first national TV commercial during NFL games this fall.

Image source: Getty Images.

Is the stock still a buy?

Alani Nu was the big driver of the quarter, and I would expect that to be the case at least in the near to medium term. The brand's strong results came without it being integrated into Celsius' distribution network. While it currently plans to run two distribution networks, I would eventually expect the company to shift Alani Nu over to PepsiCo's network. That should expand its retail presence, particularly in the important convenience store channel.

The Celsius brand saw a nice improvement in the quarter, as the brand tries to regain its traction. Meanwhile, the introduction of LTOs for the first time this fall, along with increased advertising, should help drive growth. International expansion also remains a nice opportunity.

Looking at valuation, the stock now trades at a forward price-to-earnings ratio (P/E) of around 42.5 times 2026 analyst estimates. Following its surge in price, the stock is no longer trading at the attractive valuation it was earlier this year.

While I still believe the company has a good opportunity in front of it with Alani Nu, I think the valuation is a bit ahead of itself. As such, I would not chase the stock at current levels, and would prefer it on a pullback.

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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.