Shares of energy drink company Celsius Holdings (NASDAQ: CELH) dropped lower on Friday after a outstanding analyst downgraded their outlook for the stock. As of 11:15 a.m. ET, Celsius stock was down 10%.
What’s Wall Street considering?
Bank of America analyst Jonathan Keypour downgraded Celsius stock today, in keeping with StreetInsider. According to TipRanks, the analyst has a price goal of $65 per share for Celsius, which still represents significant upside. Nonetheless, Keypour had previously beneficial buying Celsius stock, whereas now he’s downgraded his advice to neutral.
Keypour is reportedly concerned about Celsius’ sales growth going forward. And in all fairness, I think it’s reasonable to expect growth to slow for the corporate, relatively speaking.
Revenue for Celsius was up 140% and 108% in 2021 and 2022, respectively. And revenue through the primary three quarters of 2023 is up 104% from the comparable period of 2022. Maintaining triple-digit growth indefinitely simply is not realistic. So, to Keypour’s point, there may be uncertainty in regards to the company’s sales growth.
Is that this an overreaction?
I’m unsure how much Celsius will grow its top line in 2024. That said, the corporate actually has opportunities to extend the worth of its business over the long run. It’s still expanding within the U.S. and has barely tapped its potential in international markets.
Furthermore, Celsius has been growing so fast that management hasn’t had much time to optimize for profits. But that might change if sales growth slows.
Waiting for the subsequent three to 5 years, I think Celsius could turn into a more invaluable company on its current trajectory. That is more in keeping with what investors should concentrate on moderately than attempting to project growth rates for the subsequent 12 months, which is what Wall Street tends to do.
Must you invest $1,000 in Celsius right away?
Before you purchase stock in Celsius, consider this:
The Motley Idiot Stock Advisor analyst team just identified what they imagine are the 10 best stocks for investors to purchase now… and Celsius wasn’t one among them. The ten stocks that made the cut could produce monster returns in the approaching years.
Stock Advisor provides investors with an easy-to-follow blueprint for fulfillment, including guidance on constructing a portfolio, regular updates from analysts, and two recent stock picks every month. The Stock Advisor service has greater than tripled the return of S&P 500 since 2002*.
*Stock Advisor returns as of January 16, 2024
Bank of America is an promoting partner of The Ascent, a Motley Idiot company. Jon Quast has no position in any of the stocks mentioned. The Motley Idiot has positions in and recommends Bank of America and Celsius. The Motley Idiot has a disclosure policy.
Here’s Why Celsius Stock Dropped Lower Today was originally published by The Motley Idiot