5 Reasons to Buy Celsius Stock Right Now

I wasn't exactly named after 18th century astronomer Anders Celsius, but I still can't help feeling connected to the temperature scale inventor. So maybe I'm a little biased in favor of Celsius Holdings (NASDAQ: CELH), though the other Anders never invented an energy drink, and the beverage company's roots are closer to my Florida home than my Swedish origin.

With or without the namesake connection, Celsius' stock looks like a fantastic buy right now. Let me show you 5 reasons why.

Reason 1: Celsius' valuation has reset to bargain levels

Celsius used to trade at nosebleed-inducing valuation multiples. In 2023, shortly after signing a long-term distribution deal with PepsiCo (NASDAQ: PEP), the stock traded for more than 100x earnings and 15x sales. That premium has evaporated.

Nowadays, Celsius shares are changing hands at 14 times forward earnings estimates with a price/earnings-to-growth (PEG) ratio below 1.0. As for the trailing figures, the stock has cooled down to 2.5 times sales. Sure, the trailing price-to-earnings (P/E) ratio remains lofty at 68x, but that's still a big step down and doesn't account for the company's rapidly growing profits.

Celsius is not only far cheaper than arch rival Monster Beverage (NASDAQ: MNST) but also trading below Pepsi on most metrics. That's not "growth at a reasonable price" but a bargain bin discount. The market seems to expect something to go terribly wrong.

Reason 2: Alani Nu is a rocket ship

When Celsius bought Alani Nu in April 2025, skeptics wondered if the company was paying top dollar for a fad. One year later, Alani Nu looks less like a short-lived vogue and more like a durable cheat code.

The brand posted $368 million in first-quarter revenue, up roughly 60% year over year. It's already the largest contributor to Celsius' total quarterly sales, ahead of the core Celsius brand and the classic Rockstar name. Alani Nu's shelf space more than doubled, and its growth tends to accelerate when Celsius introduces it in new distribution channels.

That's not supposed to happen. Fast-growing companies in the consumer goods space usually go after the low-hanging fruit first, allocating their early budgets and efforts to where they expect the best results. Every new distribution channel thereafter should bring slower growth and/or narrower profit margins. Alani Nu is breaking these classic rules.

Limited-time flavors like Cherry Bomb and Lime Slush have become cultural moments for the brand's loyal following, driving trial buys and repeat purchases. The acquisition that looked like an expensive gamble last year is starting to look like a steal.

Reason 3: Celsius sells 21% of U.S. energy drinks

Three years ago, Celsius was the scrappy underdog trying to steal a few points of market share from Monster and Red Bull. Today, the company owns three brands and controls over 20% of the U.S. energy drink market.

That's right. One in five energy drinks sold in America now comes from a Celsius Holdings brand.

• Celsius itself covers the gym crowd. The brand stands out among energy brands via its focus on wellness and nutrition.
• Alani Nu appeals to the underserved categories of younger, female, or flavor-obsessed consumers. Social media marketing plays a big role here.
• The decades-old Rockstar brand, acquired from Pepsi last summer, lets Celsius lean into edgier branding and motor sports sponsorships.

A diversified brand portfolio should be more stable than a laser-focused single name. As CEO John Fieldly said at a recent conference, "these brands are more than the liquid in the can. It's like the threads on your shirt. It's the sneakers you wear. It's the authenticity of that brand."

In other words, brand identity matters, and Celsius is casting a wide net with three distinct brands.

Image source: The Motley Fool.

Reason 4: Margins are expanding with more room to run

Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margin hit 24.9% in Q1, up 370 basis points from a year ago. The company banked $50 million in synergies from the Alani Nu deal. A new manufacturing line opens later this year. And the company is widening its profit margins despite rising aluminum can and freight costs. Management is targeting gross margins in the low 50s, up from 48.3% today.

The margin playbook has three pillars:

• Celsius is integrating its three brands into a unified structure of shipping, raw material sourcing, and production processes. Both Alani and Rockstar were less profitable than the Celsius brand before their respective buyouts.
• The company is scaling up its production and marketing to unlock economies of scale. There is currently a single plant in North Carolina, soon to add a second production line. Over time, Celsius plans to build a nationwide supply chain with a West Coast facility and a "center of excellence" in Dublin, Ireland managing the entire system.
• The booming Alani Nu brand and evolving production setup will help Celsius build more effective marketing packages. The three brands may not overlap each other's target demographics much, but you can cross-sell Rockstar, Alani Nu, and Celsius packages to thirsty families, for example.

Image source: Getty Images.

Reason 5: World-class distribution partners give Celsius a structural advantage

Building a national beverage distribution network from scratch is a bit like building your own railroad. It takes decades, costs billions, and someone else probably already did it better. Celsius solved this problem by partnering with companies that laid the tracks years ago.

In the U.S., PepsiCo's direct-store-delivery network gives Celsius access to trucks, warehouses, and retail relationships that touch virtually every corner of American commerce. Internationally, Japanese food giant Suntory Beverage & Food (OTC: STBFY) handles distribution in key European markets, Australia, and New Zealand. For relaxing times, make it Suntory time; for energizing times, you can still make it Suntory time.

The domestic PepsiCo partnership is still evolving. Meanwhile, Suntory's European network is helping Celsius build meaningful share abroad; in Paris, the brand has grown from 2% to over 5% market share.

Anders Celsius traveled widely but always returned to Sweden. His namesake energy drink has bigger ambitions.

Anders Bylund has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Celsius Holdings and Monster Beverage. The Motley Fool has a disclosure policy.