We're CELH LONG based on strong technical confluence: liquidity has been swept, a key high that led to a new low has been taken and confirmed, and our entry aligns with a 4H breaker block and an imbalance from last week's Thursday-to-Friday price action, signaling a high-probability reversal setup.
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CELH OverviewMarket Cap: $6.2B
P/E Ratio: 30
ATH Performance: Down 70% from its all-time high due to supply chain issues.
Market Share Growth:
Q1 2022: 3.6%
Q1 2023: 7.2%
Q2 2024: 11.4%
Background: Pepsi, CELH's distributor, over-purchased inventory last year, causing a temporary drop in gross margins. Despite this, retail sales grew 7% YoY, reflecting increasing demand. Once Pepsi clears its inventory, they’re expected to resume purchases.
Financial Health: CELH’s EBITDA margin in 2021 was comparable to Coca-Cola, signifying strong financial fundamentals.
Potential for International Growth: 96% of CELH’s sales are still U.S.-based, leaving significant room for global expansion.
Institutional Backing: Major firms like JP Morgan and BlackRock are maintaining positions. Notably, 18/19 major banks rate CELH as a BUY.
Challenges: Pepsi's large inventory has temporarily limited further purchasing, resulting in underwhelming recent results.
Potential Catalysts and Considerations:
A Pepsi buyout is possible, as Pepsi is already a partial owner.
Despite an overall decline in the energy drink sector, Celsius stands out with its zero-calorie positioning.
Debt and Balance Sheet:
Short-term debt: $290M
Long-term debt: $160M
Short-term assets: $1.4B
Debt-to-Equity since 2020: 0
Conclusion: With solid financial health, growing market share, and significant international growth potential, CELH shows substantial upside. This is why we’re looking for longs, as CELH demonstrates remarkable promise.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.