Is Now The Time To Put Celsius Holdings (NASDAQ:CELH) On Your Watchlist?

The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even companies that have no revenue, no profit, and a record of falling short, can manage to find investors. But as Peter Lynch said in One Up On Wall Street, 'Long shots almost never pay off.' Loss-making companies are always racing against time to reach financial sustainability, so investors in these companies may be taking on more risk than they should.

So if this idea of high risk and high reward doesn't suit, you might be more interested in profitable, growing companies, like Celsius Holdings (NASDAQ:CELH). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Celsius Holdings with the means to add long-term value to shareholders.

See our latest analysis for Celsius Holdings

How Fast Is Celsius Holdings Growing Its Earnings Per Share?

Over the last three years, Celsius Holdings has grown earnings per share (EPS) at as impressive rate from a relatively low point, resulting in a three year percentage growth rate that isn't particularly indicative of expected future performance. So it would be better to isolate the growth rate over the last year for our analysis. Celsius Holdings' EPS shot up from US$0.50 to US$0.73; a result that's bound to keep shareholders happy. That's a impressive gain of 46%.

Careful consideration of revenue growth and earnings before interest and taxation (EBIT) margins can help inform a view on the sustainability of the recent profit growth. While we note Celsius Holdings achieved similar EBIT margins to last year, revenue grew by a solid 19% to US$1.4b. That's encouraging news for the company!

You can take a look at the company's revenue and earnings growth trend, in the chart below. For finer detail, click on the image.

While we live in the present moment, there's little doubt that the future matters most in the investment decision process. So why not check this interactive chart depicting future EPS estimates, for Celsius Holdings?

Are Celsius Holdings Insiders Aligned With All Shareholders?

We would not expect to see insiders owning a large percentage of a US$5.4b company like Celsius Holdings. But we do take comfort from the fact that they are investors in the company. Notably, they have an enviable stake in the company, worth US$423m. This suggests that leadership will be very mindful of shareholders' interests when making decisions!

While it's always good to see some strong conviction in the company from insiders through heavy investment, it's also important for shareholders to ask if management compensation policies are reasonable. A brief analysis of the CEO compensation suggests they are. Our analysis has discovered that the median total compensation for the CEOs of companies like Celsius Holdings with market caps between US$4.0b and US$12b is about US$7.9m.

The CEO of Celsius Holdings only received US$3.3m in total compensation for the year ending December 2023. First impressions seem to indicate a compensation policy that is favourable to shareholders. CEO compensation is hardly the most important aspect of a company to consider, but when it's reasonable, that gives a little more confidence that leadership are looking out for shareholder interests. It can also be a sign of good governance, more generally.

Is Celsius Holdings Worth Keeping An Eye On?

You can't deny that Celsius Holdings has grown its earnings per share at a very impressive rate. That's attractive. If you still have your doubts, remember too that company insiders have a considerable investment aligning themselves with the shareholders and CEO pay is quite modest compared to similarly sized companiess. The overarching message here is that Celsius Holdings has underlying strengths that make it worth a look at. Even so, be aware that Celsius Holdings is showing 1 warning sign in our investment analysis , you should know about...

Although Celsius Holdings certainly looks good, it may appeal to more investors if insiders were buying up shares. If you like to see companies with more skin in the game, then check out this handpicked selection of companies that not only boast of strong growth but have strong insider backing.

Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.