Why Celsius stock is up 11.5% today

Celsius Holdings (CELCH 13.88%) The stock is having a great day Thursday, rising 11.5% by 10:05 a.m. ET on the back of a pair of upbeat notes from Wall Street analysts.

Piper Sandler yesterday published the results of a survey confirming Celsius’ continued popularity among teenage energy drink drinkers. Separated, Stifel reported this morning at a National Convenience Store Association trade show, reporting positive sales trends in that market segment.

A double dose of good news for Celsius

CNBC reported on the Piper news this morning, noting that among the energy drink brands favored by teenagers, Celsius has a 35% market share. It’s pretty amazing, actually. Across the entire market, a 2023 Statista survey found Celsius achieved just single digits, while Red Bull and Monster Drink (MNST 1.04%) dominated this market, with market shares of nearly 40% and 30% respectively.

Although the two surveys cover different markets, Celsius’ greater popularity among the younger contingent suggests that Celsius’ global market share will increase as these teens age. Meanwhile, Stifel’s report shows “generally improving sales trends” for energy drinks sold at convenience stores in 2024, where 62% of all energy drink sales take place.

Is Celsius stock a buy?

A bigger share of a growing market? Sounds pretty bullish for Celsius stock. However, this remains the question of valuation. Growth prospects aside, is Celsius stock cheap enough to buy?

At 30 times earnings currently, you might not believe it. But the situation described by these two analyst reports suggests that Celsius is poised to enjoy monster growth (if you’ll excuse the term) over the next few years. Indeed, judging by analyst forecasts compiled by S&P Global Market Intelligence, Wall Street sees Celsius tripling its reported earnings over the next five years, from $0.77 in 2023 to $2.74 per share in 2028.

This results in a growth rate approaching 29% annually – almost exactly in line with the price-earnings ratio. And if you ask me, that seems like fast enough growth to make Celsius stock a buy.