What Recent Analyst Upgrades Mean for Celsius Holdings' Current Valuation

• Curious whether Celsius Holdings is trading at a fair price, or if there's hidden value waiting to be uncovered? You're in the right place. Let's dig into what the numbers and the market are telling us.
• The stock has had an exciting run, up 47.6% year-to-date and a strong 55.7% over the past 12 months. However, volatility has kicked in with a -38.1% drop over the last 30 days.
• Recent headlines have kept investors on their toes, with analyst upgrades citing impressive distribution deals and new market entries. At the same time, some caution is surfacing around fierce competition in the energy drink space. These developments help explain why Celsius has seen rapid swings in investor sentiment.
• On our valuation checks, Celsius Holdings scores a 2 out of 6 for being undervalued, a result that points to mixed signals about its price. We will break down the standard valuation approaches next, and later, reveal a smarter way to think about valuation that goes beyond the usual metrics.

Celsius Holdings scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Celsius Holdings Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates what Celsius Holdings is worth today by projecting its future cash flows and discounting them back to their present value. This approach aims to capture the value of the business based on how much cash it will likely generate in the years ahead.

Currently, Celsius Holdings reported a Free Cash Flow (FCF) of $521.99 million. Analyst forecasts suggest FCF will increase steadily, projecting $653 million in 2029. Estimates extend further, using a blend of analyst input and extrapolation, with expected FCF continuing to climb over the next decade. These numbers suggest notable growth and reflect optimism in Celsius’s financial momentum.

Based on a two-stage Free Cash Flow to Equity model, the DCF valuation estimates an intrinsic share price of $68.88. Compared to the current market price, this implies the stock is trading at a 41.7% discount. In other words, Celsius Holdings appears substantially undervalued by this metric.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Celsius Holdings is undervalued by 41.7%. Track this in your watchlist or portfolio, or discover 894 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Celsius Holdings.

Approach 2: Celsius Holdings Price vs Sales

The Price-to-Sales (P/S) ratio is often a useful indicator when valuing growth companies like Celsius Holdings, especially when profitability is still scaling up. This metric helps investors see how much they are paying for each dollar of revenue, making it easier to compare businesses regardless of where they are in their profit cycle. For companies that are growing rapidly or reinvesting profits, P/S can provide a clearer sense of underlying momentum than earnings-based metrics.

Growth expectations and risks play a big part in deciding what a “normal” or “fair” P/S ratio should look like. Fast-growing companies can warrant higher multiples, while those facing industry headwinds or rising competition might be priced more conservatively. Celsius Holdings currently trades at a P/S ratio of 4.87x. This is well above the beverage industry average of 1.93x and the peer group average of 1.56x. On the surface, this premium suggests investors are expecting rapid expansion and strong demand.

To get a more tailored sense of value, we look at Simply Wall St’s “Fair Ratio,” which weighs growth forecasts, profit margins, market cap and risk factors alongside industry norms. This makes it more comprehensive than industry or peer averages, which can miss nuance about individual companies. For Celsius Holdings, the Fair Ratio comes in at 3.66x. Since the current P/S ratio (4.87x) is more than 1x higher than the Fair Ratio, this suggests the stock is trading at a premium to its fundamentals.

Result: OVERVALUED

PS ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1421 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Celsius Holdings Narrative

Earlier we mentioned that there's an even better way to understand valuation, so let's introduce you to Narratives. In simple terms, a Narrative is your story for a company, where you connect what you believe about its future, such as how revenue and earnings might grow, with your own estimate of its fair value.

This approach goes beyond static valuation ratios by linking your perspective about Celsius Holdings to the numbers and outcomes you expect, turning complex forecasts into a clear story that supports your investment decisions. Narratives are accessible to everyone on Simply Wall St’s Community page, used by millions of investors who each bring their own insights and assumptions to the table.

When you build or review a Narrative, you can instantly compare your calculated fair value to the current share price, helping you decide whether now is the right time to buy, hold, or sell. Best of all, Narratives update automatically as new information like news or earnings is released, keeping your view relevant and powerful.

For example, some investors imagine Celsius Holdings keeping up its momentum and assign a higher future price target, while others focus on risks and set a much lower value. Narratives empower you to shape your own outlook and act with confidence, no matter which story you believe.

Do you think there's more to the story for Celsius Holdings? Head over to our Community to see what others are saying!

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.

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