Jim Cramer Notes Celsius Holdings’ Trades “A Lot Cheaper Than It Used to Be”

Celsius Holdings, Inc. (NASDAQ:CELH) is one of the 14 stocks Jim Cramer recently looked at. While discussing the stock, Cramer said that while the company stock trades at a high multiple, it is still historically cheaper.

“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.”

A hand pouring a cool can of a carbonated non-alcoholic beverage with a smiley face on it.

Celsius Holdings, Inc. (NASDAQ:CELH) develops and markets a range of functional energy and hydration drinks in various formats and flavors, and distributes them through retail, fitness, and e-commerce channels worldwide.

While we acknowledge the potential of CELH as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.

Disclosure: None.