Celsius Holdings (NASDAQ: CELH) has had a lot of positive energy over the past decade or so.
The energy drink company has posted a stellar average annualized return of 47% over the past 10 years including a 74% return in 2025. But this year, the stock has sputtered, down about 25% and hovering near a 52-week low.
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Are the forces that caused the decline something that investors should be concerned about, or is this an opportunity to buy a high-growth stock on a dip?
Let’s take a look.
Celsius stock has seen most of its decline over the past month, or more specifically, since it posted fourth-quarter 2025 earnings on Feb. 26. It was also around the time that the U.S. launched attacks at Iran, which have brought down the entire market.
At the same time, the company posted blowout revenue results, with revenue rising 117% year over year to $722 million. Much of those gains came from the acquisitions of the Alani Nu and RockStar Energy brands within the past year. It also lifted adjusted earnings 86% to $0.24 per share.
However, costs associated with the acquisitions caused earnings to drop 44% for the full year to $0.25 per share. But adjusted earnings for the year, excluding the acquisition costs, were up 91% to $1.34 per share.
The stock price decline was related largely to two factors. One, the stock’s high valuation, as the price-to-earnings (P/E) ratio surged to 381 at the end of 2025 after Celsius stock jumped 74% in 2025 largely on the optimism around the potentially transformative acquisitions.
Second, that optimism soured a bit after the Q4 earnings report even though the company easily beat estimates. Investors may have been concerned in part about the lack of short-term visibility on the integration of the two major acquisitions.
On the earnings call, management said they expected the gross profit margin to return to the low 50% range after the two new brands were integrated in the first half of 2026. The margin had dropped to 47.4% after Q4.
Perhaps the high valuation and lack of visibility during the integration caused some investors to take profits.
I think this is a great opportunity to get in on Celsius as it resets during this transformation. The next two quarters could be disrupted by the integrations, not to mention the ongoing geopolitical strife, but beyond that, Celsius should be a major player in a fast-growing segment of the beverage industry.
finance.yahoo.com
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