Celsius Holdings, Inc. CELH, a growing force in the energy drink market, has completed its acquisition of Alani Nutrition LLC (Alani Nu) for $1.8 billion. The deal includes $150 million in tax assets, bringing the net purchase price to $1.65 billion in cash and stock. This move is meant to expand Celsius’ reach in the fast-growing market for functional, health-conscious beverages.
With this acquisition, Celsius is absorbing a brand that has rapidly gained traction, particularly among Gen Z and millennial consumers. The company hopes to leverage Alani Nu’s loyal customer base and strong market presence to strengthen its position against larger competitors like Monster Beverage Corporation MNST, PepsiCo, Inc. PEP and The Coca-Cola Company KO. For investors, this development prompts a critical evaluation of CELH stock's potential in light of the acquisition.
CELH’s Big Bet on Functional Beverages
Celsius has been one of the biggest success stories in the energy drink space, with its revenues climbing from just a few hundred million dollars a few years ago to over $1.3 billion in 2024. The brand’s focus on fitness-oriented, sugar-free energy drinks has helped it carve out a significant niche in a category that continues to evolve.
Alani Nu, founded in 2018, has a similar approach, with its own line of better-for-you energy drinks and wellness products. This acquisition unites two rapidly growing brands in the health-conscious, zero-sugar energy drink market, strengthening Celsius' position in the competitive beverage industry. With the energy drink sector expected to witness a 10% CAGR through 2029, this deal aligns with rising consumer demand for functional and wellness-focused beverages. By integrating Alani Nu’s expanding product lineup and loyal customer base, Celsius is making a strategic bet on long-term growth driven by evolving health trends.
From a business standpoint, this deal is expected to enhance Celsius’ top-line growth algorithm and contribute to earnings immediately. The company expects to unlock $50 million in cost synergies within two years, enhancing profitability and driving strong cash flow growth. With an expanded distribution network and a stronger presence, Celsius is well-positioned for long-term success in the competitive beverage market.
Celsius’ Price Performance Outpaces Peers
Celsius has experienced a remarkable 24.1% surge in its stock price over the past three months. During the period, the stock has outperformed the industry and the broader Zacks Consumer Staples sector, which returned 1.2% and 7.8%, respectively, as well as the S&P 500, which has declined 6.1%.
CELH Price Performance vs. Industry, S&P 500 & Sector
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CELH has outperformed major competitors, such as Coca-Cola, Monster Beverage and PepsiCo, all of which are actively expanding in the beverage space. Over the past three months, Coca-Cola and Monster Beverage posted gains of 16.4% and 12.7%, respectively, while PepsiCo was 0%.
CELH stock closed at $35.73 yesterday, 63.9% below its 52-week high of $98.85, reached on May 22, 2025. Currently, Celsius is trading above both its 50-day and 200-day moving averages, signaling a bullish trend.
CELH Trades Above 50 & 200-Day Moving Average
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What Could Derail CELH’s Growth?
Despite Celsius’ impressive growth, several challenges could impact its performance. One major concern is rising operational costs, including raw material prices, increased freight expenses, and inflationary pressures. These factors could squeeze profit margins, making it more difficult for the company to maintain its current growth trajectory. In addition, while Celsius is expanding its retail presence, sustaining this momentum requires continuous spending on marketing, distribution, and innovation. Any slowdown in consumer demand or retailer partnerships could limit sales growth.
Another key risk is the intense competition within the energy drink industry, where established players like Monster Beverage dominate market share. To stay competitive, Celsius must continuously innovate and differentiate its products. Failure to adapt to changing consumer preferences or increased industry pressure could slow revenue growth and put profitability at risk.
Celsius Estimates Suggest a Downtrend
The Zacks Consensus Estimate for Celsius’ earnings per share for the current and upcoming financial year has been revised downward over the last seven days. This shift indicates a growing bearish outlook among analysts and highlights potential obstacles the company may face in meeting its profitability goals.
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Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Is CELH Stock Overvalued?
Celsius’ valuation looks stretched, with a forward 12-month price-to-earnings (P/E) ratio of 35.91 — significantly higher than the industry average of 16.52. The stock is trading at a premium compared to major competitors like Coca-Cola (23.82), Monster Beverage (31.40), and PepsiCo (17.77). With a Value Score of D, Celsius appears less attractive for value-focused investors.
How Should You Play CELH Stock?
While concerns about valuation and cost pressures persist, Celsius continues to expand through innovation, acquisitions, and strategic retail partnerships. The $1.8 billion Alani Nu acquisition strengthens its foothold in the health-focused beverage space, particularly among younger demographics. The company’s new product lines, strong retail placements, and multi-channel distribution strategy provide additional growth catalysts. Moreover, Celsius is expanding internationally to diversify revenue streams beyond North America.
These factors position Celsius for long-term success. However, given its premium valuation and potential risks, CELH currently carries a Zacks Rank #3 (Hold), suggesting a balanced outlook for investors.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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