Celsius: A Tale of 3 Stock Charts

If you're a Celsius Holdings (NASDAQ: CELH) shareholder, how well you're doing depends largely on where you draw your starting line. This is true of any investment, but the differences are pretty extreme for the company behind the lifestyle brand of sparkling beverages that boost a body's metabolism.

The stock itself has had quite a workout. Last week's quarterly results were disappointing on the surface, but the shares still moved nearly 7% higher for the week. There are a lot of interesting things happening right now when it comes to Celsius, but the headline promised you three stock charts. Let's zoom out before we zoom back in.

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Five years of effervescence

Celsius is better than a 20-bagger over the past five years. The top beverage stock performer in that time turned $131 million at the end of 2020 to $1.31 billion three years later, a tenfold increase. Net income soared 21-fold in those three years, outpacing the stock's five-year jump.

The namesake beverage was starting to take off well before the five-year chart got bubbly. Celsius delivered seven consecutive years of double-digit revenue growth through the end of 2019, accelerating to top-line growth north of 40% in the last three years in that run. The COVID-19 pandemic rocked the energy drink market, especially early on when folks were sheltering in place. Red Bull isn't publicly traded, but silver medalist Monster Beverage saw its revenue rise 9.5% for all of 2020, its weakest growth in seven years. Celsius went the other way.

Image source: Getty Images.

Celsius accelerated its market share gains, and revenue soared 74% in 2020. Things started to get even better, with three consecutive years of triple-digit top-line skyward bursts. It's during this time, in the summer of 2022, that Celsius found a partner in PepsiCo, a pairing that would eventually telegraph the product's mortality.

PepsiCo became Celsius' domestic distributor. It also invested in a preferred share stake in Celsius. The move helped the functional beverage reach new outlets for its product. The strong growth continued... until it didn't.

CELH data by YCharts

A rough year

Celsius shares peaked in the springtime of last year. The downticks followed after PepsiCo began to pare back on its inventory of Celsius products. Bulls dismissed this initially as a one-time blip, but the summer got worse. The explanation by some industry watchers was that the scorching hot summer of 2024 was sending folks back to more traditional forms of hydration. That theory would also eventually be debunked.

Revenue has now declined for three consecutive quarters for Celsius. Monster has posted negative growth in just three quarters over the past 15 years. The trend is not kind. Celsius' share of the domestic energy drink market peaked at 12.3% in the second quarter of last year. It has posted sequential declines for three straight reports, currently clocking in at 10.9%. Red Bull and Monster continue to dominate, with 37.1% and 27.6% slices of the market, respectively.

Celsius can point to how far it has come with a market share of 4.6% just three years ago. That growth has come at the expense of Red Bull and Monster, which have seen slight dips in their piece of the energy drink business in those three years. However, the market has found it fit to cut Celsius stock by more than half over the past year.

CELH data by YCharts

2025 to the rescue

Despite a 55% plunge over the past 12 months, shares are up nearly 40% so far in 2025. You can boil down that run to the 33% surge in the stock the day it announced a $1.8 billion cash and stock deal to acquire smaller but thriving functional beverage specialist Alani Nu, and last week's 7% gain on the news that the Alani deal closed at the start of April.

Alani gives Celsius a lifeline. Alani has been gaining market share over the past year with its tropically themed energy drinks, at the expense of Monster and Celsius. Just over the past year, Alani's slice of the stateside market has ballooned from 3.1% to 5.3%. It has more than offset the slide at Celsius, with the combined companies growing their share of this space from 15.4% to 16.2% over the past year.

Yes, its latest quarter was rough. Revenue fell 3%. Adjusted earnings plummeted 33%. The excitement now is that Alani will breathe new life into the overall business, even if it's not organic growth. Alani should be accretive to earnings as the scalability and other synergies start to kick in. Celsius was able to score Alani at a net cost of $1.65 billion after accounting for a $150 million tax asset it scored in the combination. This is just 17% of the buyer's current market cap of $9.5 billion. It's a great discounted deal for a growing business that should account for more than a third of the revenue in the year ahead.

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Rick Munarriz has positions in Celsius. The Motley Fool has positions in and recommends Celsius and Monster Beverage. The Motley Fool has a disclosure policy.