Cut in Half This Year, Can Celsius Stock Rebound in 2025?

Core Viewpoint - Celsius Holdings has faced significant challenges in 2024, with stock prices dropping over 70% from earlier highs, primarily due to slowing sales growth and inventory issues [5][8]. Sales and Market Performance - Celsius experienced a sales surge in 2023, doubling to $1.3 billion, aided by a distribution deal with Pepsico that expanded its presence in convenience stores [7]. - However, in Q3 2024, sales plummeted by 31% due to inventory optimization from Pepsico, indicating a tighter correlation between sell-in and sell-through [8]. Growth Opportunities - The company has substantial growth potential in international markets, with only 7% of sales currently coming from abroad. It has begun establishing a presence in Scandinavian countries and is exploring markets like the U.K., Ireland, Australia, France, and New Zealand [9]. - Continued innovation is crucial, with the introduction of a 16-ounce energy drink line and new flavors, which has not cannibalized existing sales [10]. - The strategy of introducing limited-time offerings (LTOs) is expected to drive sales, leveraging the brand's popularity among younger demographics [11]. Valuation - Celsius trades at a forward price-to-earnings (P/E) ratio of approximately 29, comparable to Monster Beverage's 27 [12]. - Despite its smaller size, Celsius has a larger growth opportunity ahead, having driven significant market growth in the U.S. energy drink category in recent years [13]. Future Outlook - The company is expected to face inventory mismatches in the short term, but long-term prospects remain solid, with a potential rebound in the convenience store industry anticipated in 2025 [16].