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On Friday, Stifel analysts maintained a positive outlook on Celsius Holdings (NASDAQ:CELH), reiterating a Buy rating and a price target of $37.00. The firm’s assessment followed Celsius’s fourth-quarter 2024 earnings, which showcased sales and adjusted EBITDA surpassing consensus estimates. According to InvestingPro data, the company, currently valued at $6.01 billion, appears undervalued based on its Fair Value calculations. The stock has shown significant return over the last week, gaining over 14%, though it trades at a P/E ratio of 35. The company also revealed its strategic acquisition of rival energy drink brand Alani Nu for $1.8 billion, a deal that is net of tax benefits and valued at $1.65 billion. This acquisition is calculated at 21 times Alani Nu’s trailing twelve-month adjusted EBITDA or 12 times its projected 2025 adjusted EBITDA, including $25 million in synergies expected in the first year. InvestingPro data shows Celsius maintains strong financial health with a "GREAT" overall score of 3.33, supported by robust metrics including a current ratio of 3.62 and more cash than debt on its balance sheet.
Analysts predict that the Alani Nu acquisition could increase Celsius’s sales and adjusted EBITDA by approximately 50% in 2026, assuming $50 million in run-rate synergies and a 28% average growth in adjusted EBITDA for the years 2025-2026. This forecast aligns with the company’s estimated sales expansion. Stifel’s commentary highlighted a constructive view on the near-term benefits of the acquisition, particularly the accretive nature of the deal and the potential for significant distribution enhancements to boost Alani Nu’s sales growth.
However, the analysts also pointed out that for sustained long-term success, Celsius needs to focus on improving its core sales and market share trends. They noted the challenges related to the integration of the new acquisition and the necessity to maintain the strong sales growth and market share momentum that the company experienced in 2024. Despite these challenges, Stifel’s existing estimates for legacy Celsius operations remain largely unchanged.
The firm anticipates that Celsius’s stock will outperform in the near term, driven by the recent positive developments. Nonetheless, the analysts emphasized that the key to the company’s longer-term performance will hinge on its ability to bolster underlying sales and capture additional market share. With impressive revenue of $1.36 billion in the last twelve months and a five-year revenue CAGR of 90%, the company shows strong growth potential. For deeper insights into Celsius’s growth prospects and comprehensive analysis, check out the detailed Pro Research Report available on InvestingPro, which offers 14 additional ProTips and extensive financial metrics.
In other recent news, Celsius Holdings, Inc. announced its agreement to acquire Alani Nutrition LLC for a net purchase price of $1.65 billion. The acquisition, expected to close in the second quarter of 2025, aims to create a leading platform in the energy drink market by combining two fast-growing brands. This strategic move is anticipated to enhance Celsius’s brand positioning and access to key demographics. Additionally, Celsius reported fourth-quarter earnings per share of $0.14, surpassing analyst expectations, although revenue was slightly below the consensus estimate at $332.2 million.
In analyst updates, Jefferies reduced its price target for Celsius Holdings to $33, maintaining a Buy rating, while Stifel also cut its target to $37, keeping a Buy recommendation. Both firms expressed concerns about sales growth patterns and distribution challenges but remained optimistic about the company’s long-term prospects. Furthermore, Celsius settled a shareholder derivative lawsuit with governance changes and a payment of $987,500 for attorneys’ fees, pending final court approval. This settlement includes corporate governance reforms, reflecting Celsius’s efforts to address shareholder concerns and strengthen its governance framework.
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