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SUMMARY
Parkev Tatevosian, CFA, analyzes Celsius Holdings' recent financial performance, highlighting improved profit margins and robust cash flow. The discussion covers the company's share repurchase activity and current valuation, emphasizing management's confidence in continued growth.
MAIN POINTS
- Celsius reports adjusted EBITDA of $195 million and a margin increase to 24.9% in the most recent quarter.
- Long-term analysis shows Celsius's operating profit margin and cash flow to sales ratio have improved significantly since 2016, despite volatility.
- Celsius achieved consistent double-digit cash flow to sales ratios over the past four years and repurchased 700,000 shares for $24 million at an average price of $35.39.
- Management has $236 million remaining in its authorized $300 million share repurchase program and is expected to increase buybacks as the stock price falls below previous purchase levels.
- Celsius's valuation is at its lowest in years, with a forward price-to-earnings ratio of 17.8 and a forward price-to-operating cash flow at multi-year lows.
- Despite the share price decline, Celsius remains in a growth phase, expanding internationally and increasing its market share in the energy beverage sector.
DETAILED ANALYSIS
Celsius Holdings has demonstrated notable progress in its profitability, reporting an adjusted EBITDA of $195 million for the most recent quarter, a substantial increase of approximately $125 million from the prior year. The company’s adjusted EBITDA margin rose to 24.9%, up 370 basis points year-over-year, reflecting improved operational efficiency as acquisition-related costs from the Alani Nu and Rockstar deals subside. Historical data reveals that Celsius’s operating profit margin has shifted from -12.5% a decade ago to a recent high of 5.6%, with significant volatility in between.
The operating cash flow to sales ratio has also improved, reaching 14.3% compared to -10.4% in 2016, and has remained in double digits for the past four years. This positive cash flow position has enabled Celsius to avoid external capital raises and focus on shareholder returns.
During the quarter, Celsius repurchased around 700,000 shares for $24 million at an average price of $35.39. As of June 12, 2026, the stock trades at $29 per share, down nearly 38% year-to-date, and below the price at which management previously bought shares. With $236 million remaining in its authorized $300 million repurchase program, management is expected to accelerate buybacks at these lower valuations, provided operational cash flow remains robust.
The company’s forward price-to-earnings ratio stands at 17.8, and its forward price-to-operating cash flow is at its lowest since January 2024, making the stock more attractive from a valuation perspective. Despite the recent share price decline, Celsius continues to expand internationally and increase its market share in the energy beverage sector, positioning itself for further growth.
LINKS
- YouTube channel membership for exclusive perks and early access.
- Special offer for The Motley Fool Stock Advisor.
- Parkev Tatevosian's book on evaluating publicly traded companies.
- Fiscal.ai investment research platform with a discount for viewers.
- Webull investing platform with bonus shares offer.
- Free monthly newsletter on Substack by Parkev Tatevosian.