Celsius Holdings, Inc. CELH

Key data

The business

Celsius sells sugar-free energy drinks in slim cans, the $2-ish fitness-positioned can in the gym bag and the checkout cooler. The core Celsius brand built the company. In April 2025 it bought Alani Nu, a women-focused energy brand, for about $1.8B, and PepsiCo, which took a stake and a preferred claim back in 2022, now moves most of the cans through its own trucks. The money is made the way all beverage money is made: sell finished cans to distributors at a wholesale price, keep whatever is left after ingredients, aluminum, freight and the promotional dollars it takes to hold shelf space. The moat is the two things every drink has, a brand people ask for by name and a partner big enough to get it everywhere, and both are rented as much as owned. Pepsi can favor its own brands, and shoppers are fickle about which energy can they grab. What the company actually controls is whether a second brand and a first serious push overseas can widen the base before the American core stops growing.

The numbers

Two things happened at once and they point opposite ways. Sales exploded, and per-share earnings shrank.

The last quarter was the biggest ever at $817.9M, up 10.6% on the first clean comparison that carries Alani in both years. But look at the profit line. Q3 2025 took a loss on integration and inventory write-downs, and even the good quarters earn less per share than a year earlier. Q2 2026's $55.3M profit became just $0.14 a share, because PepsiCo's preferred stake is paid before common holders and takes a real bite. The gap between the headline profit and the per-share number is the tell.

Here is the whole argument in one table. Revenue compounded about 68% a year from 2021 to 2025, an eightfold rise. Earnings per share went the other way after 2023: $0.77, then $0.45, then $0.25, even as sales nearly doubled into 2025. Growth was bought with an acquisition and carried on rented distribution, and the per-share owner got poorer while the top line got bigger. The first half of 2026 steadies at $0.47, but that leans on an easy comparison against last year's charge quarter.

The margin is where the consumer story actually lives.

Gross margin slid from 51.5% to 48.1% in a year, better than three full points, exactly as Alani's lower-margin mix and heavier promotion entered the numbers. That is the crux. The market pays about 70 times trailing earnings on the belief that scale and Pepsi's reach push margins back up and reignite the flywheel that made 2023 special. The prints so far show the opposite, decelerating growth and a thinner cut. What this memo believes the market underrates is colder and simpler: on a clean comparison this is now an 11% grower with falling margins, not a 40% grower, and the single print that settles it is Q3 2026 gross margin against core North America volume.

Management

Founder-CEO John Fieldly runs it, and in May 2026 he and two other senior officers bought stock in the open market with their own money, about $716K across three purchases against one small sale, a cluster that says insiders thought $30-something was cheap. Buybacks are token, under $6M last year, so this is not a company shrinking its share count. If anything the diluted count held at 256.9M in Q2, the higher figure flagged before and now confirmed rather than reconciled away. An August 2026 8-K announced changes to "strengthen the commercial organization," the kind of reshuffle that follows a growth scare. The record to judge is delivery against forecast: adjusted earnings came in above expectations three quarters running, then fell short in Q2 2026, the first shortfall in the streak.

How it fails or surprises you

Margin keeps sliding (downside). Gross margin fell to 48.1% from 51.5% a year ago. If Alani's mix and the promotion needed to hold shelf space drag it below 47% in Q3 2026, the earnings recovery baked into a 70-times multiple does not arrive, and the stock re-rates toward its roughly 21-times peers.

The American core has stopped growing (downside). Clean revenue grew 10.6%, but the filing does not let you split core Celsius volume from Alani and from price. If Q3 2026 North America scanner volume is flat or negative, this is a mature brand wearing a grower's multiple, and the value trap is real.

International and Alani inflect through Pepsi (right tail). Overseas is still tiny and Alani only fully entered Pepsi's system in late 2025. If those two ramp together, revenue re-accelerates past 20% and the depressed trailing earnings normalize fast. The market pays almost nothing for this today because the recent trend points the other way. The print is Q3 2026 international growth.

Closing thoughts

Q3 2026 gross margin and core North America volume answer whether this is still a grower. Margin near 48% with positive volume growth says the brand has room left and Pepsi's reach is delivering. Margin below 47% with flat or declining volume says the expansion is over, and you own a mature business trading at 70 times when peers fetch low-20s. The evidence today points more toward the downside: margins fell three points in a year, and earnings just missed for the first time. The counterweight is insider buying at $30 and an overseas business that barely shows up in the numbers but could reverse the deceleration if Pepsi executes.

The bet is still that Americans keep buying more Celsius and Alani cans and start buying them abroad, and that the company keeps more of each dollar as it scales. What breaks it is the pair to watch together: gross margin below 47% and core North America volume flat or down in Q3 2026 would tell you the growth was rented, not owned, well before any recovery in per-share earnings shows up.