Celsius Holdings (NASDAQ: CELH) recently reported its Q4 results, revealing earnings of $0.14 per share on sales of $332 million, beating consensus estimates. The company also announced plans to acquire Alani Nu, a wellness brand with energy drinks and other lifestyle products, in a $1.65 billion deal.
The acquisition is valued at 2.8x revenue multiple and comes as CELH stock surged 35% in after-hours trading. However, the stock has underperformed the S&P 500 index, down -53% since the beginning of 2024, due to a loss of market share in the US last year.
Despite this, Celsius’ revenue remained strong, with international sales growing 39% to $20 million, and its gross margin expanding by 240 bps to 50.2%. The company’s adjusted earnings were also up by 10 bps to 18.9%.
Looking ahead, the combined sales of Celsius and Alani Nu are expected to top $2 billion, with synergies of $50 million anticipated in two years. This could lead to a higher valuation multiple for CELH stock.
Currently trading at $35, Celsius Holdings is valued at 6x sales, below its three-year historical average of 9x. Given the upbeat Q4 performance and strategic acquisition, we believe the stock deserves a higher valuation multiple. The surge in its stock price may have further upside potential.
Source: https://www.forbes.com/sites/greatspeculations/2025/02/21/whats-happening-with-celh-stock