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CALLING ALL STOCK DEGENS: I haven't posted in a while because truth is, i haven't seen any good trades. Now that growth stocks in particular are crashing recently, their is some good info and value to trade on for some of these.
DISCLAIMER: I am not a financial advisor, information is for entertainment purposes only.
But good news, I am going to do a very in depth break down and analysis of Celsius Stock going forward.
CELSIUS stock has been cut in half from over $100 a share to $50 a share. This is good because it was very expensive realistically and comparable to all other beverages even accounting for its previous growth. However, the recent numbers coming out of Neilsen are insane and the fact its down 53% from high, means you will more than double your money once/if it recovers to that price.
Celsius Revenue/Sales is not only growing very fast, it has for more then a full year now, the growth % has actually been ACCELERATING!
OK bear with me here...
STONKS LESSON TIME: Normally when you have strong growth of anything, the comps/mathematical comparisons become very hard to continue with in terms of PERCENTAGES while usually only increasing the ABSOLUTE DOLLAR AMOUNT of revenues (QOQ/YOY). Good growth stocks normally grow in a DECELERATING PERECENTAGE fashion, while still increasing the raw actual DOLLAR AMOUNT of sales/revenue
Company A with beginning revenues of (10 million) increases by 10 Million revenue from 2020 to 2021. This is seen as YOY growth of 100% and 10 million in actual DOLLARS. However the next year period, 2021-2022 it grows 17 million in actual dollar amount (20 M -37 M) which is an increase now of (17 million) which is more than the 10 million a year prior, but now % wise, is only 70%. This is basic math rules of "law of large numbers" and limitations of total addressable markets/ competitive pressures almost always seen.
Now an Example of Celsius percentage gains... or wat ACCLERATING GROWTH curve actually looks like.
Company B Starts with the same 10 million revenue, now in 3 years of 200% growth you would go from 10M-30M year 1, 30m-90m year 2, 90-270 M in year 3. 10 million to 270 in 3 years. Thats the path Celsius is on just if it holds this for 1-2 years.
I think the reason for this is simple, their product is the best on the market, and fits the healthier niche perfectly for new era.
As of now, they only sell about 1.7-2% of energy drinks in North America, even less internationally; and the market as a whole still grows at around 10% a year due to population increases and thus total addressable market expanding. They will soon be in about 40% of gas stations and are already in most big Retailers just recently, which is why you see huge number growth. As being only 1.8% of sales, they will easily grow revenue 10 times todays amount in the next 2-4 years before being saturated in the market.
Comparing MNST the leader, it has 49 Billion market Cap with 5 Billion in Rev, thats a valuation of 10x Revenues, which would put Celsius in estimated 4-5 years -
(100M Revenue per quarter today x 4 quarters = 400 Million x 10x rev growth= 4 Billion per year + 10% per year of total addressable market growth = final Revenue of 4.5 Billion and final Market Cap of 45 Billion and final stock price of $625.
Yes $625.... its $50 today...
There is the breakdown, now there really isnt any reason Celsius stock would not be valuated the same as MNST in 5 years because they will basically be just as profitable once they are at scale, and no longer need to invest in growing the business, save money at large scale and can spend less on marketing and discounted deals they do now in some stores to draw in new customers, and NA is already the highest priced market with all production basically costing the same for both companies when both are at scale.
Ok you made it to the end congrats.