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Celsius: Unaltered Growth Story

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Updated - June 12

Celsius continues to collapse due to Pepsi optimizing inventory levels. Pepsi cut inventory levels by another $20 to $30 million in Q2 following $20 million in Q1 for a total of up to $50 million. The stock has now fallen from $100 to only $62 and lily on the path to the previous lows at $50. 

  • Celsius Holdings (NASDAQ:CELH) is on watch after several analysts lowered Q2 estimates on the energy drink company due in part to further inventory reduction by PepsiCo (PEP).
  • During an investor conference on Tuesday, Celsius Holdings (CELH) management quantified the PepsiCo (PEP) inventory reduction during the quarter at $20 million to $30 million sequentially, which came on the heels of a $20 million inventory reduction in Q1. "While some of the reduction was driven by PEP's working capital efficiencies and CELH starting to ship more to PEP's smaller distribution warehouses vs larger mixing centers, we believe the bulk of the 1H inventory cut reflects that PEP's inventories of Celsius exiting 2023 were too high for the recent sales rate," updated Morgan Stanley analyst Eric Serotta.

Finviz Chart

 

Originally posted on May 8

  • Celsius Holdings, Inc. reported disappointing Q1 results due to an inventory issue with PepsiCo.
  • The energy drink growth story remains intact, with strong sales data and international expansion.
  • The stock dip presents a buying opportunity, currently trading below a peer stock trading at just 7x EV/S targets.
  • Looking for a portfolio of ideas like this one? Members of Out Fox The Street get exclusive access to our subscriber-only portfolios. Learn More »
After a year of impressive results, Celsius Holdings, Inc. (NASDAQ:CELH) reported a disappointing quarter due to a surprise inventory issue. The healthy energy drink company has stumbled a couple of times in the last few months, leading to the opportunity to buy the stock far below the recent highs. My investment thesis remains ultra-Bullish on CELH stock, with the growth story unaltered despite the market hiccups.

Read the full article on Seeking Alpha. 

Disclosure: Please review the disclaimer page. No position mentioned. 

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