Shares of energy drink company Celsius (NASDAQ: CELH) fell as much as 16.8% this week, according to data provided by S&P Global Market Intelligence, as industry data pointed to slowed growth for energy drinks. Shares are down 16.7% for the week at 2:30 p.m. ET.
The energy drink slowdown
To be clear, there aren’t any earnings reports out yet, but investors are looking at market data from third-party analysts that indicate slowing growth for energy drinks. At an industry conference this week, CEO John Fieldly said he thinks the entire energy market would be in decline without Celsius.
What investors are struggling with is the right price to pay for Celsius stock. After this week’s drop, shares are still trading for more than 10 times sales and 67 times earnings. That’s an incredibly high price for a consumer stock, but Celsius has also been a growth engine that’s earned a hefty multiple.
What to do now
As a Celsius shareholder who thinks long-term, I’m looking at this pullback as more of a buying opportunity. Shares are still up over the past year and the pop this spring wasn’t driven by great results, it was just a trading phenomenon.
What I see in the business is still a growth story, although there will be volatility depending on distributor inventory, the speed at which stores reset shelves, and when international expansion takes place. What I’m more worried about are the long-term trends and a company that’s still growing over 30% annually is a good bet even at a lofty valuation.
Don’t miss this second chance at a potentially lucrative opportunity
Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.
On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:
Amazon: if you invested $1,000 when we doubled down in 2010, you’d have $20,704!*
Apple: if you invested $1,000 when we doubled down in 2008, you’d have $40,482!*
Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $352,298!*
Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.
See 3 “Double Down” stocks »
*Stock Advisor returns as of June 11, 2024
Travis Hoium has positions in Celsius. The Motley Fool has positions in and recommends Celsius. The Motley Fool has a disclosure policy.
Celsius Stock Plunges 16.8% in Terrible Week was originally published by The Motley Fool
Credit: Source link
