The bull market continues to grow. 3 reasons to buy Celsius Holdings stock like there’s no tomorrow.

The stock market is rising in 2024. The leading market indices have reached record highs in recent months. The bull market that started two years ago still has plenty of momentum today.

Manufacturer of energy drinks Celsius Holdings (CELCH -1.74%) I didn’t get that memo, though. After rising to all-time highs in the spring, Celsius’ share price has fallen 69%.

This stock isn’t every calorie-burning beverage investor’s cup of tea, of course. The incredible business growth of yesteryear has slowed to simply sensational levels, attracting a horde of bearish investors.

But I think the stock absorbed most of the price correction they had. I’m very tempted to buy some shares of Celsius Holdings for myself these days, and you might come to the same conclusion after looking at the three bullish details below.

1. Sugar-free energy drinks are still hot

People care more and more about making healthy food choices. The energy drink market is no exception.

Celsius Holdings management says sugary energy drinks saw sales decline 4% in the first half of 2024. Sales of sugar-free drinks, on the other hand, rose 7%. Arch rivals Red Bull and Monster Drink (MNST -1.08%) they noticed the trend and turned to marketing sugar-free drinks, but that also helps Celsius Holdings. Anything that inspires a consumer to look at the nutrition label before buying an energy drink could increase the mind share of health-focused competitors like Celsius.

Wallet share should follow soon.

2. The Pepsi partnership is big business

Distribution partnership signed with Celsius Holdings PepsiCo (PEP -0.35%) in 2022 it started paying dividends immediately. The revenue growth that followed was a direct result of Pepsi’s expertise in carrying and merchandising beverages in every type of store.

It’s true that domestic growth has stalled recently as the duo of Pepsi and Celsius have built their presence across the nation. It’s also true that Pepsi is reducing its energy drink orders by about $120 million in the third quarter of 2024. The distribution partner ordered too much product in the first half of the year and needs to clear overstocked warehouses. This pullback plays a significant role in the low share price you see today for Celsius Holdings.

But I’m talking about a long-term business where this quick fix in inventory will feel like a minor drop in the long run. It’s only a matter of time before Pepsi ships as many Celsius cans as the brewer can produce. Moreover, the opportunity for energy drinks is huge worldwide and these partners are barely scratching the surface of international distribution so far. Monster Beverage gets nearly half of its quarterly sales from international markets, as does Red Bull.

Celsius Holdings’ sales are 95% domestic. There is a huge opportunity for growth in overseas markets, almost entirely untapped so far.

3. The company should do better in a revitalized economy

Bull markets do not always coincide with a strong global or US economy. Consumers and businesses are still grappling with the fallout from the recent inflation crisis, and people are still walking on price-sensitive eggshells around the convenience store.

The 7-11s and Wawas of the world account for a huge portion of the energy drink market and have seen much less foot traffic in this tight economy. Celsius is expanding its shelf space in that lucrative, high-margin market by leaps and bounds. This trend should continue in a healthier economy.

“We’ve seen space gains of 45% in comfort, where a preponderance of energy sales come from,” Celsius chief executive Toby David said on a conference call with investors last month. “We think that’s really going to be a growth driver for us going forward. So when the category comes back, we feel we are well positioned.”

Time to buy this misunderstood growth stock

This is far from the whole story. I could go on and on about Celsius Holdings’ strong balance sheet and its proven ability to take market share from more experienced rivals, but that will have to wait for another article.

My three bullish arguments add up to a strong investment case even without these additional details. In short, skeptical investors are throwing Celsius Holdings out with the bathwater, making the stock incredibly affordable for the rest of us. If you want to buy this promising growth stock on the decline, this is your chance to take action.