CELH 是长期投资者的买入标的；鉴于强劲的利润率和审慎的收购，10 倍远期市盈率是一个较低的入场点。

I wanted to talk tonight about um Celsius Celsius Holdings, right? They own the Celsius beverage. You can see in the screen here uh they they own Celsius. They just bought Rockstar.

Pepsi quieted earlier than Celsius bought it from u from Pepsi. Um so you know they're bragging about portfolio 20% in Q2 of the energy market by share. Uh Celsius is a very large dominant player that's kind of come out of the woodwork quickly and gained a lot of market share.

And then down at number six, you've got Celsius Holdings, $3.2 2 billion dollar in uh retail sales right behind Monster. Now I think a lot of investors had similar hopes for for Celsius. They've been downbeat recently. Uh so we want to see what that what that looks like and maybe there's an opportunity here.

uh just they're they're continuing to come out with different flavors like everybody does. Once you gain market share, you have infrastructure, you can you begin diversifying your uh your your portfolio to kind of take advantage of or market to a variety of different people uh different demographic demographics, walk of life, so on so forth.

Um thought this was interesting. Number four, energy drink, 70% of women between 18 and 44. So then they're segmenting the market even smaller uh and allowing their supply chain to be able to fill these at at a at a reasonable price. So very very uh standard playbook.

This one caught my attention and I I think I did not I certainly did not read the headline that they had bought Monster, excuse me, Rockstar. I was under the impression that Rockstar was still a Pepsi holding company. But in Q2 of 2025, you can see they purchased uh Rockstar Energy and prior to that, their sales were kind of bumping along. Uh it was not nearly the rocket ship I think people were expecting, or at least it had before. the the the Rockstar movement is definitely changed their outlook.

And that's what the the um founder of Rockstar came out recently and said that the Celsius management team needs to be let go. They're not doing what they're what they should be doing.

So I think this this so this is where I'm thinking interesting. They uh they just bought it for 585 million. And if you look at the gap in revenue someplace here, look at this jump in revenue. This is showing us the kind of the revenue that uh Rockstar is going to contribute.

There you go. Uh you can see this jump from 300 million to 700 million. that $400 million of revenue is is the Rockstar portfolio. And uh and they bought that for a little over 500 million. So that's a little over one times sales, which is a good price to pay for a company that size. I have to say I think it's a good deal uh that uh Celsius bought.

We're going to go down to the EPIDA margin just to do kind of a a quick wa walk of what their what Celsius is disclosing in their in their holding. So here's first six months of 2020 six net income and they're going to walk down to non-GAAB depreciation. What I like here is it's if this is pretty clean interest tax depreciation fine that's a quarter billion dollars of EBIDA in um six months.

Stockbased comp 18 billion. That's not that high. So for all the startup companies we've seen, that's a decent comp for management team. Uh which I guess Russ says isn't doing their job, but at least it's not 10% of revenue.

Acquisition costs fine. We can live with that. Um distributor termination and a legal settlement both one time. I agree. 380 380 uh million uh 380* 2 that's 776 million of EBITDA in um in kind of the year run rate 23% EBITDA margin strong margin okay so I kind of like that

All right, so I'm going to zoom in so you guys can see this because if you're looking on your phones, it's always a pain. Totally get it. All right, this is Celsius revenue in 2016. You know, very small 23 million billion dollars. Uh what gets interesting is as it starts scaling um 23 36 53 75 by 2020 they're doing 13 31 million.

Um then by 2021 300 600 1.3 1.3 again and 2.5 billion in revenue um in 2025. So that's a it's it's hard to say. I mean technically yeah it's 79% compound annual growth rate but it starts such a small small base really so it's hard to say you can't run that out but it's just a metric

EBITDA they were they were negative for many years as they I guess were putting everything in marketing uh and then recently certainly with the acquisition of um of Rockstar they're they're printing pretty very strong Ebida numbers. I mean $570 million of profit on 2.5 billion of revenues is a good let's let's see what margin is that 20ome% 23% right that's a strong that's a strong margin

debt uh easily it's one one um uh evidas so debt's not a problem I did not give them any credit for excess cash flow I thought it is what it is market cap 11 billion uh as this is as of their fiscal year end of 2025. So it's a little stale. We can do the market cap uh the current market cap in a second.

EV and the enterprise value. You can see when they're young, right? It's very hard to value businesses when they're young. Can you guys see this? No, I'm I'm in my way. It's very hard to to value businesses when when they're young. They're just not profitable. who knows on on a price multiple basis. It's kind of irrational. You really have to try to predict the future, which I think we all agree is very difficult to do.

So, you kind of wait a little bit, let the business calm down, figure out margins, figure out a game plan, and then maybe you can get a good deal if and when the business turns u unpopular. And that might be where we are here.

Let's take a look at cash flow from operations. Cash flow from operations going to kind of follow a similar plan to Ebidal, right? It's it's negative for the first five years or so of this cash flow forecast. It follows EBITDA. So hopefully at least they're in line with what they were saying.

And then it begins to grow 100 140 263 million of cash operations. Capex is very small. These guys don't need a tremendous amount of capex to continue their manufacturing.

Do I know why the stock has fallen so much or do not? We can try to we can try to figure that out.

But free cash flow. So this is uh so free cash flow is kind of in in this range 360 minus 36 330 million or so of of cash flow. Shares have have grown obviously since the beginning. They were issuing stock to um issuing stock to cover the losses. Once losses stop you expect the share issuance to also stop. And you're seeing that a little issuance here. Maybe this is for the capital to buy to buy Rockstar.

Uh let's see this. Let's see what cash flow per share looks like just for a second. If I just look at just these two, I don't want to pick up the debt that they have. So they're generating a dollar a$127 in revenue, excuse me, in um cash flow per share. That's a 5% yield. Okay, that's pretty that's actually very decent for a company that has been growing like this, that was a kind of a growth darling for a while. A 5% cash flow yield is a strong yield for a company that has pretty decent upside potential.

Uh let's go to let's go to uh the forecast. So what I've done here is I've simply kind of pulled what's what's out in the market. What what does the street think this business is going to do in the next couple years? And then it kind of brought that growth rate down to something that's just an estimate.

Uh so next year they're thinking um 700 million of of Iboda. kind of what we had seen on that Q1 presentation I went through to begin to on the first half, right? We said there was roughly 3 and um what was it 336 months times two get you about 700 700 million of of EBITDA in 2026. So that's that's half booked. Um so it looks like they're going to achieve that. If they did, that would be 25% year-over-year growth rate in um in their earnings.

Is their only debt from the purchase of the rocks of Rockstar? Doesn't seem like they have that many expenses. I think you're right. I think they financed some of that that cash that they had to come out of pocket to do so. It was a good deal if they bought it for $585 million. So, I would have, if I was a bank, I would have lent this company that kind of money. They had no debt before. Their first, it's their first um first deal. They bought a cash flowing asset. The asset was proven. I like the I like the deal. It's a prudent use of of cash in my opinion.

Okay. So then um what we do here is I'm just kind of stretching IBA out and saying I don't I don't have a crystal ball, but if they continue, so I I can't I don't have a I don't Thank you. I don't have a crystal ball, right? None of us know what the future's going to be and we're trying to put our money onto a forecast that we believe with enough certainty that you're willing to put your money against it. That's kind of the idea here.

So if if this 713 million is half in the bag, right? It's halfway through the year. So the next year they got to grow at 13% 13 10 8 and so forth to get them to 1.6 6 billion out 10 years from now. I think that's reasonable in in in my eyes.

I put a 20 times market multiple on it because this business has really high high margins.

okay. So, let's go back. Uh, let's hit the So, 1.6 6 billion of of of earnings out 20 times multiple gets me to $117 $118 a share out 10 years with this forecast. Um if I did a free cash flow method again they're roughly a $1.40 a share now that's going to grow over time they could send about $3.50 50 cents following the same the same curve uh I gave on on um the EBITDA putting a two times a 2% excuse me free cash flow yield on that I get 1778 a share. So I kind of split the difference and say okay this stock might be about 150 is a fair price for this thing out 10 years if I'm going to buy it and hold it.

Okay. So, you then look and say, "What can I buy the stock for today?" I you can buy all the stock you want right now for $27. So, 27 bucks. Uh let's see what what um uh what market cap is that. So, I've got shares outstanding, right? $255 million times the current stock price, uh, $27 a share. Multiply those together and I get $6.8 billion of market cap. If I add the debt, which isn't much, but I'll add the c debt. Uh, there is no cash that's excess. So this is my enterprise value 7.5 billion. And if I take this year's EBITDA, which is kind of halfway done, 713, and divide the two, that is a 10x multiple on a uh on a company that's growing 25% annually.

Um its earnings and that seems really cheap actually in this in this market. It's quite attractive. I think that's why it's giving you this 27% irr that could be produced if this pans out, right? This is just an assumption. We know this number is real. Over time, we expect slow earnings grow growth or moderate moderately placed earnings growth, reasonable market multiples of say 20x on the um Ibida or 2% free cash flow yield. They're at 5% right now. you're getting a little bit of margin expansion over time.

Um, you know, this they're not buying back shares, so it's not the trifecta that we've identified a couple instances where they're actually buying shares back. Um, but in fact, I'll go a little further. When we looked at their shares, if you look right here, when they didn't really need the shares, they stopped they stopped issuing when they were profitable before they bought Rockstar and then they bought Rockstar, issued some stock. Fine.

Um gross margin deteriorating. Maybe we can take a look at it. Um, but I think this is this is really interesting. It's an interesting play. Let's go take a look at the gross margin comment.

See. We got I don't know how we're going to diagnose it. We're just going to verify if it's happening. See if it's moving around. Uh so here we go. This is uh Celsius Holdings. Here's the gross profit. Here's the gross margin. Well, gross margin went up, which is a good thing. Maybe you mean quarterly. Let's take a look. Three quarters in a row. Yeah, dipped down a little bit. Last three quarters, it dipped down a little bit. Maybe that's So, it's 48% in the last quarter. Let's go back to fiscal years and go back long term. What is it? What has it been? 50 51 one. So, it's pulled back 3%. Maybe this, you know, I don't know. I don't have an answer for you. Maybe it's up and down. Maybe it's the way they changed something different. Um, it's definitely have an impact on earnings for sure.

Maybe this is, you know, I don't know. I don't have an answer for you. Maybe it's up and down. Maybe it's the way they changed something different. Um, it's definitely have an impact on earnings for sure.

lawsuits. Yes. So, I think there was an issue with the actual uh some sort of lawsuit claiming adverse effects, which might be true. That's why I don't I don't drink them. So, uh that's I'm not making any kind of claim on the product. I'm just looking at some numbers and saying and I think that's why in their in their presentation, right, there was a settlement.

Go back to Celsius Holdings in their adbacks here. They had a legal settlement right there. $25 billion. Uh 25 million. CB these are thousands. So assuming that captured all of the outstanding liability from that legal, maybe it's put it behind them and they've moved on. I don't know, maybe there's more to come. That's kind of up in the air and maybe that's what's affecting the stock.

Uh what he didn't do is we didn't look at the stock price itself just to see what happened over time. Yeah. So, you can see right here, this stock down 50% in a year.

Uh, and if I pull up the EBID market multiple, look over time, uh, physical years. Give me one second. Sorry about that. Let's uh let's go back to uh fiscal year. Yeah, the ibida doesn't I I covered this early. Sorry, I forgot it. It it's all over the place. So, you can't look really historical. Ibida. You kind of have to just judge for um what it's done recently and what you think it's possible to do. looks to me like it could actually do well over time.

Um I don't know where um I don't know what the Russ's comments are in the management if um if if Russ's comments about getting out getting management out of the business that they're not allocating capital, right? If there's some sort of shareholder argument or fight, that's going to affect stock, right? that's going to impact how management invests money going forward, how they treat disclosing uh earnings, um how they set forecasts, it could be a major disruption. And if management feels like there's pressure to make things happen, it could in it could force them to do other acquisitions kind of to keep their job essentially to say, "Hey, you know, I've got pressure from shareholders. Um, I need to make it sound like I'm

I don't know where um I don't know what the Russ's comments are in the management if um if if Russ's comments about getting out getting management out of the business that they're not allocating capital, right? If there's some sort of shareholder argument or fight, that's going to affect stock, right? that's going to impact how management invests money going forward, how they treat disclosing uh earnings, um how they set forecasts, it could be a major disruption. And if management feels like there's pressure to make things happen, it could in it could force them to do other acquisitions kind of to keep their job essentially to say, "Hey, you know, I've got pressure from shareholders. Um, I need to make it sound like I'm doing a lot of work to justify my job, my salary, my cup, so that I'm going to go buy this, you know, other drink company and pitch uh the investors that it's a good deal when in fact maybe it's not. So having uh shareholder pressure like that with Russ's comments that that management should be fired and replaced. I think it was the CEO, COO, head of marketing, he was calling for their their termination. That kind of pressure if gains gains momentum can cause management to make decisions to justify their existence rather than what's in the best interest long term of a business. So, I think some of that is contributing to the decline in price,

but if you put your long her long long-term cap on and say, look, the energy drink market is not going anywhere. Um, you know, Celsius is a known quantity. It has capabilities to distribute and and and roll up brands. They're starting to do that with what looks like a very kind of a prudent deal with with Rockstar on a on a revenue multiple at least. So I and they have low debt so they can do additional deals to to grow. It seems really interesting to me.

I think if you're a long-term investor, if you like the beverage, uh I would I would be a buyer of it. Uh the stock I think it's an interesting view for someone long term. Obviously, if you're not an energy drink fan, don't like the brand, don't want to be in the consumer good space, then uh then it's a pass. But pretty pretty very very interesting company.

Um so but I I think that's why this stock has actually come down buying at 10 times forward earnings is a very low cost entry point for what could be a top five brand top six brand in the world.