The Boca Raton, Fla.-based company makes lifestyle fitness beverages that it says contain no sugar, preservatives, aspartame or high fructose corn syrup. Celsius beverages come in sparkling and noncarbonated flavors; it also offers powder stick packets that can be mixed with water.
Like most other stocks, Celsius got hit during last year’s coronavirus market crash, which effectively shut down the global economy. And it still had a cautious outlook in March, even though earnings and sales have begun to rebound.
“While we have started to improve in the third and fourth quarter with capacity restrictions as well as reopenings in hardest hit channels, there still remains uncertainty,” CEO John Fieldly said in the Q4 earnings call. He added that, “There potentially could be reclosings (due to) additional cases increasing in our regions of operations, which could force extended closures in some states and countries.”
In Q4, earnings doubled to 2 cents a share, while sales rose 48%. And the stock has staged a remarkable recovery after a 55% drop during the crash. Celsius stock surged more than 2,090% from its March 2020 low to its January 2021 high. Shares are up 29% this year, well ahead of the S&P 500’s 11% return.
Celsius is working on the right side of a 14-week-old consolidation with a 70.76 buy point, according to MarketSmith chart analysis. It’s about 8% away from the entry. Note that the base is third stage, which raises the risk of a failed breakout. Stocks tend to make their biggest runs out of earlier stage bases.
Best Beverage Stocks To Watch
IBD Stock Checkup assigns Celsius an 88 Composite Rating, which gives investors a quick way to gauge a stock’s key growth traits. That puts it second in the 17-stock nonalcoholic beverage group, which includes Coca-Cola (KO), Monster Beverage (MNST) and National Beverage (FIZZ).
A 72 Earnings Per Share Rating, part of the overall composite score, is also among the top stocks to watch in the group. Celsius turned its first annual profit of 16 cents a share in 2019, and 11 cents in 2020. Analysts expect a slight dip to 10 cents a share this year, before a 170% jump to 27 cents in ’22.
The drinks maker scored profits the past three quarters after year-ago earnings in the low single digits or even losses. However, analysts expect a flat result for Q1.
Top 1% Of All Stocks
On the technical front, a 99 Relative Strength Rating means Celsius is beating 99% of all other stocks. Its relative strength line, which compares a stock’s performance to the S&P 500, is slightly below its Jan. 19 peak. A move to new highs at or ahead of a breakout would be a bullish sign.
A B Accumulation/Distribution Rating points to more recent net buying vs. selling by mutual funds. At the end of Q1, 294 funds owned Celsius shares, a sharp jump from 219 and 170 in the prior two quarters.
Follow Nancy Gondo on Twitter at @IBD_NGondo
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