Celsius Holdings, Inc. (CELH): A Bull Case Theory 

We came across a bullish thesis on Celsius Holdings, Inc. on Stock Croc (patiently hunting ‘Quality’ stocks)’s Substack by Stock Crock. In this article, we will summarize the bulls’ thesis on CELH. Celsius Holdings, Inc.’s share was trading at $53.91 as of January 28th. CELH’s trailing and forward P/E were 449.25 and 36.23 respectively according to Yahoo Finance.

Celsius Holdings Inc. has emerged as a leading player in the fast-growing functional energy drink market, leveraging its “better-for-you” positioning and PepsiCo’s distribution muscle to scale rapidly. Once a niche fitness-focused brand, Celsius has expanded into a portfolio company with the acquisitions of Alani Nu and Rockstar, targeting broader demographics and consumption occasions.

 Operationally, Q3 2025 results were strong, with revenue and EPS materially beating expectations, yet the stock fell sharply as investors focused on execution risks rather than headline growth. The sell-off reflects concerns around inventory distortions, a widening gap between reported revenue growth and scanner data, and fears that recent growth may be inflated by channel dynamics rather than true consumer demand.

Celsius benefits from powerful secular tailwinds, including rising health consciousness, zero-sugar preferences, and an expanding global energy drink market dominated by a few large players. Its partnership with PepsiCo, which provides category captaincy and unmatched distribution reach, represents a meaningful competitive advantage, while brand positioning in “functional fitness energy” is difficult for incumbents like Monster or Red Bull to replicate without cannibalizing their core offerings. However, the company’s moat is still developing, and competitive intensity remains high.

Strategically, the Alani Nu acquisition appears offensive and growth-enhancing, while Rockstar adds complexity and turnaround risk at an inopportune time. Near-term margins are pressured by integration costs, logistics inefficiencies, and accounting noise, though management expects normalization in 2026.

Valuation now implies more tempered growth assumptions, with Celsius trading at a significant discount to Monster despite faster growth. At current levels, the stock appears fairly valued with limited margin of safety, offering asymmetric upside only if inventory issues prove temporary and execution improves, while downside risk remains meaningful if growth expectations reset further.

Previously, we covered a bullish thesis on Celsius Holdings, Inc. (CELH) by One-Hovercraft-1935 in May 2025, which highlighted the company’s clean-label positioning, strong retail demand, PepsiCo-backed distribution strength, and international expansion momentum despite temporary inventory disruptions. CELH’s stock price has appreciated by approximately 38.44% since our coverage due to easing distributor issues and improving investor confidence. Stock Crock shares a similar thesis but emphasizes execution risks, inventory distortions, and valuation sensitivity following recent earnings.

Celsius Holdings, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 58 hedge fund portfolios held CELH at the end of the third quarter which was 52 in the previous quarter. While we acknowledge the risk and potential of CELH as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CELH and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.