Huge acquisition and a possible stock recovery!
Update: Celsius FY 2024!
To say that Celsius has had a tough 2024 would be an understatement.
I released my Celsius Deep Dive on 27. May 2024, when with a market cap of $22B, the company was at the top of the world! On the back of the Pepsi partnership, Celsius reported 95% revenue growth in Q4 2023 and 37% in Q1 2024.
Since then, however, the story has shifted dramatically! As a result of slowing growth, the stock has collapsed 75% to a market cap of a mere $5B. The narrative was bleak, until yesterday!
Read my full Deep Dive to learn more about the company!
On Wednesday, the company suddenly announced that it will report earnings on Thursday and participate in a Wall Street consumer goods analyst conference on Friday. This announcement sent the stock up 14%, as investors speculated that pulling earnings forward must mean that good news are coming.
And they were right!
Yesterday, Celsius announced a $1.8B acquisition of Alani Nu, their largest direct competitor! Wall Street loves deals, thus, the stock jumped 35% on the news!
In this update, I will look back at 2024, the problems, and the new financial reality.
Of course, now that we have more information, an updated valuation model will be presented!
Let’s dig in!
1. Pepsi Inventory Issues
2. Distribution
3. Alani Nu Acquisition
4. Sales and Profits
5. Valuation
6. Conclusion
1. Pepsi Inventory Issues
On 1. In August of 2022, Pepsi invested $550M in Celsius and became their exclusive distribution partner in the USA and Canada. (Read my full analysis of the partnership in Part 2 of the Celsius Deep Dive)
Pepsi channel quarterly revenue grew by 348%