Celsius Holdings, Inc. (NASDAQ:CELH) is one of the stocks Jim Cramer recently shared his thoughts on. A caller asked for Cramer’s short and long-term outlook on the stock, and he replied:
“Oh my God, I like John Fieldly [at] Celsius. Yeah, I got this book coming out, and this did not make it into the book. I wish it had. I think this company is doing incredibly well. I like them…”
Stock market data. Photo by Photo by Alesia Kozik
Celsius Holdings, Inc. (NASDAQ:CELH) produces and markets energy and hydration products under the CELSIUS brand. It provides drinks, powders, and ready-to-drink options in multiple flavors and formats. Cramer discussed the stock in a June episode. He commented:
“How did Celsius get its mojo back, and more importantly, can it keep that mojo going? First, when the company reported in February, it delivered some excellent numbers and more importantly, it agreed to buy an outfit called Alani Nu…. As a result, the combined entities expect to have annual revenues north of $2 billion after the deal closes. Management believes this deal will be additive to earnings in the first year and sees an opportunity to rack up $50 million in synergies in the first two years.
Management also noted that together Celsius and Alani Nu accounted for about 50%… of total growth in the energy drink category last year. And because Celsius has a much larger distribution network than Alani Nu, integrating the two brands should generate some explosive growth… Since that earnings report in May, analysts have been turning more positive on Celsius. In part, that’s because the quarter was encouraging, but it’s also the case that in the nearly two months since then, scanner data has been incrementally positive for Celsius and Alani Nu…
Celsius is expensive, trades at 57 times this year’s earnings, but historically, believe it or not, that’s a lot cheaper than it used to be. Over the past three years, the average forward price to earnings multiple for this stock has been closer to 89 times earnings.
Let me give you the bottom line here: While Celsius may be a momentum name, the comparisons are about to get much easier. The standard trends have already improved, and I think Alani Nu acquisition, it could be a huge positive. So I wouldn’t be surprised if the stock could keep running. Although if you don’t own it yet, you might want to wait for a pullback before you pull the trigger.”
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Disclosure: None. This article is originally published at Insider Monkey.
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