CELH is now overvalued and could go down -36%
Celsius Holdings, headquartered in Boca Raton, Florida, develops and markets functional drinks, notably the CELSIUS fitness drink, available in ready-to-drink and powder forms, with international distribution. The company employs 765 people and went public on October 10, 2006.
Based on our analysis, Celsius Holdings has received an overvalued rating of 1 out of 5 stars from Cashu, primarily due to its financial ratios that do not favorably compare to the sector averages.
The company's Price to Earnings (PE) Ratio stands at 27.61, significantly higher than the sector average of 19.48. A higher PE ratio indicates that investors are paying more for each dollar of earnings, which may suggest overvaluation. Additionally, the Price to Book (PB) Ratio for Celsius is 11.60, compared to the sector's 2.19. This indicates that investors are valuing Celsius shares at a much higher premium relative to the company's book value, further supporting concerns about overvaluation.
While Celsius boasts a strong Net Profit Margin of 17.21, which is impressive against the sector's negative margin of -9.39, this metric alone does not justify the elevated valuations. The Return on Assets (ROA) Ratio of 14.76 also outperforms the sector average of -10.84, indicating effective asset utilization. However, the company's Dividend Yield is only 0.47, significantly lower than the sector average of 2.33, suggesting a less attractive return for dividend-seeking investors.
In summary, Celsius Holdings demonstrates strong profitability metrics, but its excessive valuation ratios raise concerns about its sustainability in the current market environment. Investors should approach this stock with caution, considering its high PE and PB ratios relative to the sector.
This is not a comprehensive overview of our valuation, and should not be viewed as financial advice. Always do your own research before considering an investment.
