Celsius(US:CELH) The Motley Foolยท2024-12-12 10:22Core Viewpoint - The article compares Celsius and Coca-Cola, highlighting that while Celsius is a smaller, high-growth energy drink company, Coca-Cola is a slower-growing, established market leader with a diverse beverage portfolio [1][14]. Group 1: Celsius Overview - Celsius has experienced a significant stock price decline of 40% over the past 12 months, contrasting with Coca-Cola's 6% stock price increase [2]. - The company focuses on sugar-free energy drinks made from natural ingredients, claiming thermogenic properties that aid calorie burning during workouts [3]. - Celsius' revenue more than doubled in 2021, 2022, and 2023, but only grew by 5% year-over-year in the first nine months of 2024, indicating a slowdown as it faced a decline in domestic market share [5]. - Analysts project Celsius' revenue to rise by 4% in 2024, with a compound annual growth rate (CAGR) of 11% from 2023 to 2026, alongside a similar growth expectation for adjusted EBITDA [6]. - The company generated 95% of its revenue in North America in the first nine months of 2024 and faces strong competition from Red Bull and Monster Beverage [7]. - Celsius has an enterprise value of $6.7 billion, valued at 19 times next year's adjusted EBITDA, but may not attract a higher valuation without accelerated domestic growth and successful overseas expansion [8]. Group 2: Coca-Cola Overview - Coca-Cola has adapted to declining soda consumption by diversifying its product offerings, launching and acquiring brands in various beverage categories [9]. - The company has shown strong organic sales growth, with 16% in 2021 and 2022, 12% in 2023, and expects 10% growth in 2024, alongside a projected 5% to 6% increase in comparable EPS for the year [10]. - Coca-Cola's stock is valued at $63 per share, at 22 times this year's earnings, and it has a strong dividend history, having raised its dividend for 62 consecutive years, with a forward yield of 3.1% [11]. - Analysts expect Coca-Cola's reported revenue and EPS to grow at a CAGR of 4% and 9%, respectively, from 2023 to 2026, making it a stable investment option [12]. - Coca-Cola's long-term investment in Monster Beverage provides a conservative way to benefit from the energy drink market's growth [13]. Group 3: Investment Comparison - Celsius is currently viewed as less favorable due to concerns over its growth potential and competition in the energy drink market [14]. - Coca-Cola is considered a solid long-term investment, likely to generate stable returns even in a bull market focused on higher-growth stocks [15].