Is it too late to buy Celsius stock?

While everyone was eagerly watching the "Gorgeous Seven" stocks, there was one other company that made investors fall off the wagon: Celsius (NASDAQ resonance stock code: CELH)The

Over the past five years (as of April 5)(math.) genusThis one. Drinks Unit Soaring 5860% is perhaps the most desirable business to own in this period.

Older shareholders may be tempted to take advantage of the situation and consider taking profits. Potential investors may wonder if it is too late to buy the stock.

Reward for Growth Stories

Consumers are increasingly interested in health and wellness, and Celsius seems to be benefiting from this. The company's energy drinks, marketed as functional drinks, focus on natural ingredients and caffeine. Obviously, this has had a huge impact on consumers.

Last year, Celsius generated $1.3 billion in revenue. That's an increase of 102% compared to the same period last year, and a 10-fold increase compared to three years ago. This type of revenue comes from a beverage company, not an artificial intelligence business. Sales growth is undoubtedly a key factor in attracting shareholders' attention.

Celsius' products can be found in many different retail settings such as mass retailers, convenience stores and gyms. Wide distribution and meeting consumer demand are key to increasing revenue.

The company has had great success online. According to the Gunn team. 2023 (math.) genusCelsius, yes. AmazonThe best-selling energy drink brand in the world. This is a remarkable achievement. This is a remarkable achievement. Amazon is a E-commerce The giant is sure to bring any consumer brand to new heights, as it is likely to be the first place consumers search for when shopping online. In addition, by utilizing Amazon's vast logistics network, Celsius will be able to reach more homes.

Last August, Celsius met with PepsiCoagreement was reached. as the beverage and snack giant's domestic and international distribution partner. PepsiCo had sales of $9.2 billion last year and has a presence in more than 200 countries and territories. Adding Celsius to this vast distribution network can only help to grow sales over the long term. In addition, it will allow the energy drinks business to More revenue in overseas markets(math.) genusDue to North AmericaMarketsLast year it accounted for 96% of Celsius' sales, and that's a huge opportunity.

Looking ahead, Wall Street expects a gradual slowdown in growth from the recent triple-digit pace. The analyst consensus estimate for the next three years is that revenues will grow at a compound annual rate of 35%. This forecast remains encouraging.

Leaders in the industryMonster Beverage)Sales in 2023 will be $7.1 billion. If investors believe that Celsius can someday reach that level, there's a lot to be said for it.

Understanding Anticipation

There is a lot to like about Celsius' trajectory. I completely understand why investors who have been on the sidelines would want to rush in and snap up the stock to capitalize on the momentum. After all, Celsius has an impressive share price through 2024.

But investors need to know what to expect. After all, even the best companies can be bad investments if they are overvalued. I think this is the case with Celsius.

At the time of writing, the stock (used form a nominal expression)PE ratio At 109, this is an extremely high valuation multiple, reflecting the current outrageous optimism and enthusiasm surrounding Celsius. In my view, this valuation makes it almost certain that the company's business can continue to grow substantially indefinitely. There is no room for error.

This situation is usually not suitable for investments. The market has high hopes for the company. If Celsius fails to meet those expectations when it publishes its financial results, even by a minor error, the share price will be hit hard.

Yes, the stock price may continue to climb in the short term. But it's impossible to predict. Based on the stock's dramatic rise and current valuation alone, I think it's too late to invest in Celsius.

Should you invest $1,000 in Celsius now?

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John Mackey, former Chief Executive Officer of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's Board of Directors. Neil Patel and his clients have no positions in any of the stocks mentioned above. the Motley Fool has positions in Amazon, Celsius and Monster Beverage and recommends these stocks. the Motley Fool has a disclosure policy.

Is It Too Late to Buy Celsius Stock? This post was originally published by The Motley Fool.