Actions of energy drink company Celsius (NASDAQ:CELH) fell as much as 16.8% this week, according to data provided by S&P Global Market Intelligence, with industry data reporting slowing growth in energy drinks. Shares are down 16.7% for the week as of 2:30 p.m. ET.
The slowdown in energy drinks
To be clear, no earnings report has been released yet, but investors are looking at market data provided by third-party analysts that indicates slowing energy drink growth. At an industry conference this week, CEO John Fieldly said he believed the entire energy market would be in decline without Celsius.
What investors are struggling with is the right price to pay for Celsius stock. After this week’s decline, shares still trade at more than 10 times sales and 67 times earnings. That’s an incredibly high price for a consumer stock, but Celsius has also been a growth engine that has generated a significant multiple.
What to do now
As a long-term Celsius shareholder, I view this pullback as a buying opportunity. Stocks are still up over the past year and this spring’s rally wasn’t driven by great results, it was simply a business phenomenon.
What I see in the business is still a growth story, although there will be volatility depending on distributor inventory, how quickly stores reset their shelves, and when international expansion takes place . What worries me most are long-term trends and a company that continues to grow 30%+ per year is a good bet, even at a high valuation.
Don’t miss this second chance and a potentially lucrative opportunity
Have you ever felt like you missed the boat by buying the best performing stocks? Then you will want to hear this.
On rare occasions, our team of expert analysts issues a “Doubled” actions recommendation for businesses that they believe are on the verge of collapse. If you’re worried that you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:
Amazon: If you invested $1,000 when we doubled down in 2010, you would have $20,704!*
Apple: If you invested $1,000 when we doubled down in 2008, you would have $40,482!*
Netflix: If you invested $1,000 when we doubled down in 2004, you would have $352,298!*
Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.
*Stock Advisor returns June 11, 2024
Travis Hoium has positions in Celsius. The Motley Fool posts and recommends Celsius. The Motley Fool has a disclosure policy.
Celsius stock plunges 16.8% in terrible week was originally published by The Motley Fool
