What Happened?
Shares of energy drink company Celsius (NASDAQ:CELH) fell 12.2% in the morning session after the company reported underwhelming third-quarter earnings. Notably, revenue fell sharply by 31% year on year due to reduced orders from the company's largest distributor, which was in the middle of an inventory optimization process. The effect of the sales miss rippled all the way down from the gross margin line, which declined, leading to a miss on EBITDA and EPS. Overall, this was a weaker quarter.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Celsius? Access our full analysis report here, it’s free.
What The Market Is Telling Us
Celsius’s shares are extremely volatile and have had 32 moves greater than 5% over the last year. But moves this big are rare even for Celsius and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 27 days ago when the stock gained 14.9% on the news that Wall Street analysts provided positive updates on the company. Stifel observed improving sales trends, adding, "Energy drink trends should accelerate led by comparables, innovation, [and] pricing."
Additionally, Piper Sandler's findings confirmed Celsius's popularity among teenagers. These updates are supportive of improved demand for Celsius's offerings while underscoring the company's strong positioning in the competitive energy drink market.
Celsius is down 49.6% since the beginning of the year, and at $29.77 per share, it is trading 69% below its 52-week high of $96.11 from March 2024. Investors who bought $1,000 worth of Celsius’s shares 5 years ago would now be looking at an investment worth $24,146.
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