Celsius Holdings, Inc. (NASDAQ:CELH), the popular energy drink company, is set to release its Q4 2024 earnings results after the market closes tomorrow. This report comes after a challenging Q3 where Celsius missed revenue expectations. What can investors anticipate from this upcoming announcement?
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Last quarter, Celsius reported revenues of $265.7 million, a 30.9% year-over-year decline and a 1.3% shortfall compared to analysts’ projections. The company also significantly missed adjusted operating income estimates, making it a disappointing period overall. This performance raises questions about the company’s ability to rebound in Q4.
Analysts predict a further revenue decline of 6.3% year-over-year, reaching $325.5 million. This contrasts sharply with the impressive 95.2% growth recorded in the same quarter of the previous year. Adjusted earnings per share are expected to be $0.10. Over the past month, analysts have largely maintained their estimates, suggesting a consistent outlook for the upcoming report. However, it’s worth noting that Celsius has fallen short of Wall Street’s revenue expectations in five of the last eight quarters.
Industry Peers Offer Insights into Q4 Performance
Examining Celsius’s competitors within the beverages, alcohol, and tobacco sector provides some context. Coca-Cola (NYSE:KO) exceeded expectations with a 5.4% year-over-year revenue increase, surpassing projections by 7.8%. Philip Morris International (NYSE:PM) also delivered strong results, reporting a 7.3% revenue growth, exceeding estimates by 2.8%. Following their earnings releases, Coca-Cola’s stock price surged 6.5%, and Philip Morris saw a 10.2% increase. These positive results from industry giants raise the bar for Celsius’s performance.
Market Context and Analyst Outlook for Celsius
The broader market experienced positive momentum in 2024, driven by the Federal Reserve’s successful inflation control and subsequent interest rate cuts. The re-election of Donald Trump further boosted market sentiment. However, the beverages, alcohol, and tobacco sector underperformed the general market, with average share prices declining by 3.8% over the past month. Celsius experienced a steeper decline of 10.9% during the same period.
Currently, the average analyst price target for Celsius stands at $37.61, significantly higher than its current share price of $23.93. This discrepancy suggests a potential for growth, but the Q4 earnings report will be crucial in determining whether Celsius can regain investor confidence.
Conclusion: A Pivotal Moment for Celsius
The upcoming Q4 earnings announcement represents a critical juncture for Celsius. Following a disappointing Q3, the company faces pressure to demonstrate a turnaround. While industry peers have posted strong results, Celsius is projected to experience a continued revenue decline. The market’s reaction to the earnings report will likely depend on the company’s ability to meet or exceed expectations and provide a clear path toward future growth. The results will offer valuable insights into Celsius’s ability to navigate current market challenges and capitalize on the growing demand for energy drinks.
