What Happened?
Shares of energy drink company Celsius (NASDAQ: CELH) jumped 3.6% in the afternoon session after the company provided a positive business update ahead of a conference, highlighting strong market share growth and progress on integrating its Alani Nu brand with its PepsiCo distribution partner.
The update, released before its appearance at the Morgan Stanley Global Consumer & Retail Conference, showed the company's portfolio reached a 20.2% market share in the energy drink sector over the 12 weeks ending November 23. Celsius noted that its portfolio grew by 25.5% during that period. This growth significantly outpaced the broader energy drink category, which increased by 13.7%. The company also confirmed that its transition of the Alani Nu brand into PepsiCo's distribution network was more than 80% complete, signaling successful execution of its operational plans.
After the initial pop the shares cooled down to $41.77, up 2.3% from previous close.
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What Is The Market Telling Us
Celsius’s shares are extremely volatile and have had 32 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 27 days ago when the stock dropped 23.8% on the news that the company reported underwhelming earnings. The company announced impressive year-over-year revenue growth of 173% to $725.1 million, slightly ahead of estimates. Adjusted earnings per share of $0.42 also comfortably beat the consensus forecast. However, investors appeared to focus on the company's deteriorating profitability. Celsius reported a negative operating margin of 11%, a sharp decline from the negative 1.2% margin in the same quarter last year. This drop suggested that operating expenses, such as marketing and administrative costs, grew even faster than its impressive sales, raising concerns about its cost controls and the efficiency of its rapid expansion. Despite the strong top-line performance, the significant pressure on profitability seemed to spook investors, leading to the sharp sell-off.
Celsius is up 53.6% since the beginning of the year, but at $41.77 per share, it is still trading 35.6% below its 52-week high of $64.86 from October 2025. Investors who bought $1,000 worth of Celsius’s shares 5 years ago would now be looking at an investment worth $3,460.
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