TLDR:
- Celsius (CELH) stock surged 39% in pre-market after beating Q4 2024 estimates across EBITDA, EPS, and revenue metrics
- The company announced a $1.8 billion acquisition of rival energy drink brand Alani Nu
- Short sellers faced approximately $250 million in paper losses due to the stock surge, with shorts holding about 23% of Celsius’ float
- Combined market share of Celsius and Alani Nu will reach approximately 16% of the energy drink market
- Some analysts remain cautious, citing potential sales cannibalization and slowing sector growth
Energy drink maker Celsius Holdings (NASDAQ: CELH) saw its stock price surge 39% in pre-market trading Friday after the company announced better-than-expected fourth quarter 2024 results and a major acquisition. The stock movement marked its largest intraday rise since May 2020.
The company reported earnings that exceeded analyst estimates across multiple metrics, including EBITDA, EPS, and revenue. This performance suggests Celsius has moved past earlier challenges related to inventory overselling to PepsiCo.
Celsius also revealed plans to acquire competitor Alani Nu for $1.8 billion. The strategic purchase will combine two brands focused on health-conscious consumers, particularly targeting the female demographic with sugar-free offerings.
CEO John Fieldly addressed the acquisition during Thursday’s conference call, noting that the combined companies will control approximately 16% of the energy drink market share. Fieldly highlighted Alani Nu’s growth trajectory, comparing it to Celsius’s position from two years ago.
The stock’s sharp rise had immediate implications for short sellers, who held about 23% of Celsius’s float. According to data from analytics firm S3 Partners, these investors faced paper losses of approximately $250 million on Friday alone.
Ihor Dusaniwsky, managing director of predictive analytics at S3, expects to see a reversal of recent short selling activity. He predicted that accelerated short covering could further boost the stock price, alongside strong buying interest from long-term investors.
Stock Volatility
The company’s stock has shown considerable volatility over the past year, with 36 moves greater than 5%. At $32.62 per share, despite the recent gains, the stock remains 66.1% below its March 2024 peak of $96.11.
Looking at longer-term performance, investors who purchased $1,000 worth of Celsius shares five years ago would now hold an investment valued at $15,291, highlighting the company’s strong historical returns.
The stock had already demonstrated positive momentum earlier in the year, rising 19.9% since January 2025. Previous analyst updates have supported the company’s market position, with Stifel noting improving sales trends and Piper Sandler confirming the brand’s popularity among teenage consumers.
However, some market analysts maintain a cautious stance on the acquisition. TD Cowen analyst Robert Moskow, who maintains a hold rating on the stock, raised concerns about potential sales cannibalization between the two brands, given their similar target demographics.
Moskow also questioned the long-term consumer loyalty for Alani Nu, citing its reliance on social media-driven marketing strategies.
Energy Drink Sector
The broader energy drink sector faces its own challenges, according to Truist analyst Bill Chappell, who also holds a hold rating on Celsius. Chappell noted that slowing sector growth might lead to increased competition through new flavor launches and promotional activities.
These competitive pressures could potentially impact sales growth and profitability across the industry, including the combined Celsius-Alani Nu entity.
The acquisition announcement comes as Celsius seeks to maintain its growth trajectory in the competitive energy drink market. The deal is expected to expand the company’s market presence and product portfolio.
The company’s fourth quarter results and acquisition news mark a notable departure from its previous challenges, including the inventory overselling issue with PepsiCo that had previously concerned investors.
