Energy drink company Celsius Holdings (CELH) has had a bit of a rocky run lately. In fact, it’s only recently started to come off a prolonged dive that started back in May. However, its latest expansion plans seem to have investors very pleased, and Celsius shares rose over 1.5% in Tuesday afternoon’s trading.
Basically, Celsius plans to chase some bigger markets such as Australia, New Zealand—natural picks since they’re comparatively close together—and France. The expansion is set to come before the end of the year, and given that the Australian summer starts in December, that could be a natural fit indeed.
Meanwhile, Robert Moskow from TD Cowen had mixed praise for Celsius. He noted that the company’s latest set of results were encouraging, but there are still lingering issues about growth potential that could get in the way. A market expansion like this, however, might put at least some of these concerns to rest.
More Growth Potential Ahead?
Growth is still one of the biggest concerns analysts—and by extension investors—likely have about Celsius. However, its latest earnings report suggested that there is still more room for growth. International sales were up 30%, reaching nearly $20 million overall, as brand awareness seems to be on the rise and people are willing to try its products.
One major source of growth was its recent connection to Amazon (AMZN). The Amazon sales alone were up 41%, hitting almost $40 million. If that pace can sustain itself for any length of time, Celsius might prove to be a major brand before too much longer. Granted, economic issues will weigh on sales accordingly—people who are watching their pennies closely don’t often buy new beverages—but these weights might be comparatively minor as more just scale back rather than stop altogether.
Is Celsius Holdings a Good Stock to Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on CELH stock based on 10 Buys and four Holds assigned in the past three months, as indicated by the graphic below. After an 11.25% loss in its share price over the past year, the average CELH price target of $74.67 per share implies 78.59% upside potential.
