Celsius Holdings (CELH) gave investors a jolt of caffeine on Thursday, with its shares popping after the company served up a quarterly report that was stronger than expected on the top and bottom lines. The energy drink maker pointed to serious momentum, and even some margin pressure couldn't sour the mood, especially with a bullish analyst chiming in.
The company reported fourth-quarter adjusted earnings of 26 cents per share, comfortably beating the consensus estimate of 20 cents. The real eye-opener was the sales number: $721.6 million, which is more than double—a 117% increase—from the same period last year and well ahead of what Wall Street was looking for.
"As PepsiCo's energy category captain in the U.S. and with an aligned commercial strategy, we reached an approximate 20% dollar share of the U.S. energy drink category in Q4 2025," CEO John Fieldly said. That's the kind of market-share grab that gets investors' attention. The growth was almost entirely domestic, with North America sales surging 124% to $699.5 million, while International sales saw a more modest 9% rise.
How the Brand Portfolio Performed
Looking at the whole portfolio—which now includes the CELSIUS brand, plus recently acquired Alani Nu and Rockstar Energy—retail sales in U.S. tracked channels were up 24.4% for the period. But the story within the story is a bit more nuanced.
The flagship CELSIUS brand's retail sales grew a solid 12.8% year-over-year. Alani Nu, which Celsius bought last April, saw its retail sales skyrocket 76.9%. On the other hand, Rockstar Energy, acquired last August, saw its retail sales decline by 10.3% for the period. It's a classic tale of integrating new assets: some fire on all cylinders immediately, others need a bit more work.
The Cost of Building an Empire
With great growth comes... well, sometimes costs. Gross profit for the quarter jumped by over $175 million to $341.8 million. However, the gross margin slipped by 280 basis points to 47.4%. Management was quick to point out this wasn't a fundamental business problem, but rather the price of doing ambitious deals.
The margin was hit by several one-time costs tied to integrating Alani Nu and Rockstar Energy, and specifically from moving Alani Nu into the massive PepsiCo distribution system. The company also recorded costs from terminating some old distributor agreements following the Alani Nu acquisition. All this moving and shaking added up: the total buyout obligation related to these distributor changes reached about $327.5 million by the end of the quarter.
Despite those headwinds, the company's underlying profitability looked strong. Adjusted EBITDA still managed to grow 113% to $134.1 million. "With CELSIUS, Alani Nu, and Rockstar Energy, we're building a scaled Modern Energy portfolio with distinct roles, recruiting new consumers and expanding consumption occasions," Fieldly added. The company finished the quarter with a healthy $398.9 million in cash.
What the Analyst Saw
The report was enough for Goldman Sachs analyst Bonnie Herzog to double down on her bullish stance. She reiterated her Buy rating on the stock with a $72 price target.
Herzog argued the stock still offers a favorable risk-reward setup, with plenty of potential upside coming from continued market share gains and eventual margin expansion as the integration dust settles. She believes investors might be underestimating the company's growth runway over the next few years, which could lead to the stock getting re-rated higher.
On valuation, she called it attractive, noting the stock trades at about 33.9 times her estimate for fiscal year 2026 earnings. That represents a 44% premium to other beverage peers, but a 10% discount to giant rival Monster Beverage (MNST). Importantly, Herzog pointed out that these premium levels are actually below Celsius's own three-year historical averages, suggesting there might be room for the valuation to expand back toward its norm if the growth story holds.
In the end, the market seemed to agree with the positive take. The one-time costs were noted, but the overwhelming strength of the sales beat and the powerful market-share narrative, backed by analyst confidence, carried the day for Celsius investors.
