Celsius Stock Plunged 52% Last Year: What Went Wrong and What's Next?

Celsius Holdings (CELH) stock took a nosedive in 2024, plummeting 52% from its highs earlier in the year. This dramatic decline has left investors wondering what went wrong and whether the stock has any potential for recovery. Let's dive into the key factors that contributed to Celsius' stock performance and explore what the future might hold for this energy drink giant.



Celsius' stock price decline can be attributed to a combination of factors, including:

1. Normalization of growth: After a remarkable 2023, driven by the distribution deal with PepsiCo, Celsius' growth inevitably slowed as it began to lap those gains. This caught many investors off guard, as they had grown accustomed to the company's eye-popping sales growth.
2. Convenience store struggles: As Celsius expanded its presence in the convenience store channel, these stores began to face traffic declines due to inflation, high interest rates, and job market uncertainty. This led to a slowdown in the energy drink category, which grew just 1% in 2024 compared to 8% in 2023.
3. Inventory management issues: In the first quarter of 2024, Celsius missed revenue expectations due to inventory management issues with its largest customer, PepsiCo. This led to a 31% year-over-year revenue decline in the third quarter of 2024, the first time the company posted negative growth since 2018.



Despite these challenges, Celsius remains well-positioned for future growth and recovery. The company's strong brand and distribution network, coupled with its untapped international expansion opportunities, set the stage for a potential turnaround. Additionally, Celsius' stock is trading at a forward price-to-earnings (P/E) ratio of just under 30 times next year's estimates, which is not expensive given the company's long-term growth prospects.



In conclusion, Celsius' stock price decline in 2024 was driven by a combination of factors, including the normalization of growth, convenience store struggles, and inventory management issues. However, the company's strong brand, distribution network, and international expansion opportunities position it well for future growth and recovery. As an investor, it's essential to stay informed about the company's progress and assess its potential for long-term success.