Shares of Celsius Holdings (NASDAQ: CELH) soared in morning trading on Wednesday after the maker of the global fitness drink, Celsius reported earnings of $0.40 per diluted share, a jump of 344% year-over-year and above analysts’ expectations of $0.25 per share.
The company posted record Q1 revenues of $260 million, up 95% year-over-year and beating consensus forecasts of $247.9 million. The rise in revenues was predominantly driven by North American revenue which soared by 101% year-over-year to $249 million and was “driven by increases in distribution points and SKUs [stock keeping units] per location as well as some benefit from increased days inventory outstanding at the mixing centers of its largest distributor.”
Following the upbeat Q1 earnings, Bank of America analyst Jonathan Keypour upgraded Celsius stock to a Buy from a Hold and views the results as an encouraging sign that channel trends are proving to be a reliable indicator of improved consumption. Keypour has a price target of $125 on the stock implying an upside potential of 16.7% at current levels.
The analyst also believes that its distribution partnership with Pepsico (PEP) would expand the brand’s presence and Celsius’ broad demographic appeal would also be a big positive for the company. Keypour commented, “We see considerable sales and EBITDA potential as a result, with accelerating velocity signaling sales upside and additional operating leverage despite the highly competitive category.”
Analysts remain bullish about CELH stock with a Strong Buy consensus rating based on a unanimous nine Buys.
