TLDR
- Celsius Holdings (CELH) stock rose 10.52% on Monday to $29.93
- CELH has dropped 71.03% over the past 52 weeks but gained 21.22% in the last month
- PepsiCo’s acquisition of Poppi for $2 billion positively impacted CELH’s stock
- CELH’s decline was partly due to PepsiCo reducing inventory, causing a 6% drop in North American sales
- The company recently acquired Alani Nutrition to enhance its position in the sugar-free beverage market
Celsius Holdings, Inc. (NASDAQ:CELH) shares jumped 10.52% on Monday, closing at $29.93. The energy drink maker has been on an upward trend recently despite facing a challenging year overall.
The stock’s Monday rally came in response to news that PepsiCo, which holds a major stake in Celsius, is expanding its healthy drinks portfolio. PepsiCo announced an agreement to acquire prebiotic soda brand Poppi for $2 billion.
This acquisition news sparked investor interest in Celsius, which produces fitness and energy beverages marketed as healthier alternatives to traditional energy drinks.
“More than ever, consumers are looking for convenient and great-tasting options that fit their lifestyles and respond to their growing interest in health and wellness. Poppi is a great complement to our portfolio transformation efforts to meet these needs,” PepsiCo Chairman and CEO Ramon Laguarta stated regarding the Poppi acquisition.
Celsius has experienced a difficult year financially. The stock has plummeted 71.03% over the past 52 weeks, reflecting several challenges the company has faced.
One major factor in this decline was reduced unit velocity and softer macroeconomic conditions affecting revenue. North American sales dropped by 6% after PepsiCo, Celsius’s largest distributor, reduced its inventory levels.
Celsius has shown signs of recovery
Despite these challenges, Celsius has shown signs of recovery recently. The stock has surged 21.22% over the past month, indicating a potential turnaround.
In its fourth quarter, Celsius announced the acquisition of Alani Nutrition. This strategic move could strengthen its position in the sugar-free beverage market and was well-received by investors.
Technical indicators suggest mild upward momentum for the stock. The 20-day Simple Moving Average (SMA) has risen by 1.64%, though the 200-day SMA remains negative at 26.74%.
Institutional interest in Celsius remains strong. According to Insider Monkey’s database for Q4 2024, 33 hedge fund portfolios are tracking the stock.
Celsius competes with major energy drink brands like Monster and Red Bull. The company has built its market position through brand loyalty, strategic partnerships, and distribution expansion.
Based in Florida, Celsius specializes in fitness beverages designed to boost energy levels. Its flagship product contains natural ingredients, which appeals to health-conscious consumers.
The broader stock market context may also be helping Celsius’s recent recovery. Markets kicked off this week on a positive note, with all main indices finishing in green territory.
Positive market sentiment
This positive market sentiment came as economies took a pause from their tariff war. Investors also responded favorably to February retail sales data, which showed a 0.2 percent increase.
While below analysts’ expectations of 0.6 percent, the retail sales figures weren’t as bad as some had feared. Excluding automobiles, sales rose by 0.3 percent, in line with economists’ forecasts.
Following these economic developments, the Dow Jones gained 0.85 percent, the S&P 500 rose 0.64 percent, and the tech-heavy Nasdaq increased by 0.31 percent.
Celsius ranked second among companies leading Monday’s market gains. The stock meets criteria for short-term momentum stocks, having declined more than 30% over the past year while gaining more than 7.5% in the past month.
The PepsiCo-Poppi transaction remains subject to customary closing conditions, including regulatory approval. Additional terms of the acquisition were not disclosed.
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