Celsius Holdings and PepsiCo Enhance Their Long-Term Strategic Alliance
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Aug 29 2025
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Should l Buy CELH?
Source: Businesswire
Strategic Partnership Announcement
- Celsius Holdings and PepsiCo Collaboration: Celsius Holdings, Inc. and PepsiCo, Inc. have announced a strengthened long-term strategic partnership, which includes the integration of Celsius's Alani Nu brand into PepsiCo's distribution system in the U.S. and Canada.
- Financial Investment: PepsiCo has invested $585 million in newly issued convertible 5% preferred stock in Celsius Holdings, while also extending its existing preferred stock to the same conversion period.
- Acquisition of Rockstar Energy: Celsius Holdings has acquired the Rockstar Energy brand in the U.S. and Canada from PepsiCo, which will continue to manage the brand internationally.
Market Positioning and Growth Strategy
- Celsius as Strategic Energy Lead: Celsius Holdings will take on the role of PepsiCo's strategic energy drink captain in the U.S., overseeing the CELSIUS, Alani Nu, and Rockstar Energy brands, while PepsiCo will handle distribution.
- Targeting New Consumer Segments: The partnership aims to leverage Alani Nu's appeal to female consumers focused on fitness and lifestyle, enhancing retail availability across various channels in the U.S. and Canada.
- Broader Portfolio Appeal: The addition of Rockstar Energy is expected to attract consumers who prefer traditional energy drink flavors, thereby expanding Celsius's market reach.
Leadership Insights
- Statements from Executives: John Fieldly, CEO of Celsius Holdings, emphasized the importance of this partnership in shaping the future of modern energy drinks and enhancing brand growth through a unified distribution strategy.
- PepsiCo's Vision: Ram Krishnan, CEO of PepsiCo Beverages U.S., highlighted the strategic alignment of both companies to create a robust multi-brand energy portfolio that caters to diverse consumer needs.
Financial and Legal Advisory
- Advisory Teams: Celsius Holdings is advised by UBS Investment Bank and Goldman Sachs, while PepsiCo is supported by Centerview Partners and BofA Securities, among others, for this strategic transaction.
Future Engagement
- Webcast Announcement: Celsius Holdings will host a webcast to discuss these developments with investors, providing further insights into the partnership and its implications for the company's future.
Company Backgrounds
- Celsius Holdings Overview: Celsius Holdings is a functional beverage company known for its energy drink brand CELSIUS and health-focused products, aiming to innovate within the better-for-you beverage category.
- PepsiCo Overview: PepsiCo operates globally, generating nearly $92 billion in net revenue in 2024, with a diverse portfolio of iconic brands and a commitment to sustainability through its pep+ initiative.
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Analyst Views on CELH
Wall Street analysts forecast CELH stock price to rise
17 Analyst Rating
14 Buy
2 Hold
1 Sell
Strong Buy
Current: 36.380
Low
45.00
Averages
62.85
High
80.00
Current: 36.380
Low
45.00
Averages
62.85
High
80.00
About CELH
Celsius Holdings, Inc. is engaged in the development, processing, marketing, sale, and distribution of functional energy drinks to a range of consumers. The Company's flagship asset, CELSIUS, is marketed as a lifestyle and energy drink. This product line comes in two versions: a ready-to-drink form and an on-the-go powder form. It also offers a new CELSIUS Essentials line, available in 16-ounce cans and a Hydration line of zero-sugar powders that are infused with electrolytes and are available in a variety of fruit-forward flavors. Celsius products are offered in retail channels across the United States, including conventional grocery, natural, convenience, fitness, mass market, vitamin specialty and e-commerce platforms. Its product's formulation includes ingredients and supplements such as green tea (EGCG), ginger (from the root), calcium, chromium, B vitamins and vitamin C. The Company's product portfolio also includes the health and wellness brand Alani Nu.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Technology Sector Decline: In stark contrast, the technology sector has fallen over 7% year-to-date, reflecting a potential reassessment by investors towards energy stocks, which may lead to a shift in capital towards energy for higher returns.
- Portfolio Adjustments: Inside Edge Capital has increased its allocation to energy from 2% to 10% in its growth portfolio and from 6% to 14% in its equity income portfolio, indicating strong confidence in the long-term growth potential of the energy sector.
- Strong Archrock Outlook: Archrock (AROC), one of the largest natural gas compression companies in the U.S., is projected to have a dividend yield between 1.5% and 9% by 2025, with a net EPS CAGR exceeding 7%, underscoring its significance and growth potential within the energy value chain.
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- Increased Competition: Costco's launch of new energy drinks under its Kirkland Signature brand, priced at $19.99 for a 24-pack, significantly undercuts Celsius's $37.99 price, raising shareholder concerns about intensified market competition that could erode Celsius's market share.
- Sales Dependency: With Costco accounting for approximately 11% of Celsius's sales, the introduction of competing products poses a direct threat to Celsius's revenue, highlighting the company's vulnerable position in the market as shareholders express their worries.
- Brand Loyalty: Costco's Kirkland Signature products enjoy high customer loyalty, evidenced by membership renewal rates of about 92% in the U.S. and Canada and nearly 90% worldwide, underscoring the retailer's strong branding power.
- Global Expansion Plans: Costco aims to increase its warehouse count from 914 to 942 by the end of fiscal 2026, further expanding its market reach, and although its forward P/E ratio stands at 49, value investors may want to wait for a lower valuation before considering investment.
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Celsius Holdings Stock Decline Analysis
- Significant Revenue Growth: Celsius Holdings reported a 117% year-over-year revenue increase to $722 million in Q4 2025, primarily driven by the acquisitions of Alani Nu and Rockstar Energy, although overall earnings dropped 44% to $0.25 per share due to acquisition costs.
- Negative Market Reaction: Despite exceeding earnings expectations, the stock price declined due to high valuation and short-term integration uncertainties, with a P/E ratio reaching 381 by the end of 2025, prompting profit-taking by investors.
- Future Growth Potential: The energy drink market is projected to grow at an 8% CAGR through 2033, with Celsius holding a 20% market share, and the acquisitions are expected to strengthen its market position.
- Investment Opportunity Emerges: Although integration may cause short-term volatility, Celsius's forward P/E of 22 and a PEG ratio of just 0.34 indicate long-term investment value, with Wall Street's price target of $69 suggesting a 102% upside.
See More
Celsius Acquires Rockstar and Alani Nu Amid Stock Decline
- Acquisition Impact: Celsius Holdings' acquisition of Rockstar Energy and Alani Nu resulted in a 117% year-over-year revenue increase to $722 million in 2025, demonstrating the positive revenue impact of the acquisitions, although full-year earnings per share dropped 44% to $0.25 due to acquisition costs, highlighting short-term integration challenges.
- Market Reaction: Despite Celsius exceeding expectations in its Q4 2025 earnings report, its stock price fell 25% due to high valuation and integration uncertainties, with the P/E ratio soaring to 381 by the end of 2025, intensifying investor concerns about future profitability.
- Earnings Outlook: Management anticipates that gross profit margins will rebound to the low 50% range after the integration is completed in the first half of 2026, with the current margin at 47.4%, indicating a potential recovery in profitability that could attract long-term investor interest.
- Market Share and Growth Potential: Following the acquisitions, Celsius holds a 20% market share and is expected to benefit from an 8% compound annual growth rate in the energy drink market over the coming years, suggesting a favorable long-term outlook despite short-term integration and geopolitical risks.
See More
Analysis of Market Impact from Iran War
- Surging Oil Prices: The ongoing Iran war has led to a significant increase in global oil prices, with approximately 20% of the world's oil passing through the Strait of Hormuz, resulting in an overall market decline and expected long-term economic impacts.
- Extended Rebuilding Timeline: The reconstruction of LNG assets is projected to take 3-5 years, and if the conflict persists, this timeline may extend further, posing greater challenges to the global economy.
- Supply Chain Complexity: The current issues are more complex than mere supply shortages, particularly with Qatar's LNG facilities damaged, leading to uncertain recovery times that could affect production across multiple industries.
- Investor Sentiment Deterioration: The S&P 500 has dropped about 4% year-to-date, with the fear and greed index falling to 17, indicating a heightened fear among investors regarding future market conditions, which may lead to increased market volatility.
See More
Celsius Shares Rise 4.5% After Upgrade by Deutsche Bank
- Rating Upgrade Impact: Deutsche Bank upgraded Celsius from Hold to Buy, citing a recent 33% stock decline as an overreaction to new competition, with Costco expected to account for only 10% of 2025 sales, thereby boosting market confidence in the stock.
- Price Target Adjustment: Despite the upgrade, Deutsche Bank lowered its price target from $56 to $44, reflecting a cautious stance on market competition, while TD Cowen reiterated a Buy rating, viewing the recent pullback as excessive.
- Market Volatility: Celsius shares have experienced 25 moves greater than 5% over the past year, and today's rise indicates that the market considers this news significant, though it does not fundamentally alter perceptions of the business, highlighting investor caution.
- Long-term Investment Returns: Although Celsius is down 25.5% year-to-date, investors who bought $1,000 worth of shares five years ago would now see their investment worth $2,220, demonstrating potential long-term gains despite short-term challenges.
See More
Energy Sector Leads in 2026 with 36% YTD Return
- Energy Sector Performance: The energy sector boasts a year-to-date return of 36% in 2026, leading all sectors and demonstrating robust market performance amid increasing global economic uncertainties.
- Technology Sector Decline: In stark contrast, the technology sector has fallen over 7% year-to-date, reflecting a potential reassessment by investors towards energy stocks, which may lead to a shift in capital towards energy for higher returns.
- Portfolio Adjustments: Inside Edge Capital has increased its allocation to energy from 2% to 10% in its growth portfolio and from 6% to 14% in its equity income portfolio, indicating strong confidence in the long-term growth potential of the energy sector.
- Strong Archrock Outlook: Archrock (AROC), one of the largest natural gas compression companies in the U.S., is projected to have a dividend yield between 1.5% and 9% by 2025, with a net EPS CAGR exceeding 7%, underscoring its significance and growth potential within the energy value chain.
See More
Costco Launches New Energy Drinks, Raising Concerns for Celsius Shareholders
- Increased Competition: Costco's launch of new energy drinks under its Kirkland Signature brand, priced at $19.99 for a 24-pack, significantly undercuts Celsius's $37.99 price, raising shareholder concerns about intensified market competition that could erode Celsius's market share.
- Sales Dependency: With Costco accounting for approximately 11% of Celsius's sales, the introduction of competing products poses a direct threat to Celsius's revenue, highlighting the company's vulnerable position in the market as shareholders express their worries.
- Brand Loyalty: Costco's Kirkland Signature products enjoy high customer loyalty, evidenced by membership renewal rates of about 92% in the U.S. and Canada and nearly 90% worldwide, underscoring the retailer's strong branding power.
- Global Expansion Plans: Costco aims to increase its warehouse count from 914 to 942 by the end of fiscal 2026, further expanding its market reach, and although its forward P/E ratio stands at 49, value investors may want to wait for a lower valuation before considering investment.
See More
Celsius Holdings Stock Decline Analysis
- Significant Revenue Growth: Celsius Holdings reported a 117% year-over-year revenue increase to $722 million in Q4 2025, primarily driven by the acquisitions of Alani Nu and Rockstar Energy, although overall earnings dropped 44% to $0.25 per share due to acquisition costs.
- Negative Market Reaction: Despite exceeding earnings expectations, the stock price declined due to high valuation and short-term integration uncertainties, with a P/E ratio reaching 381 by the end of 2025, prompting profit-taking by investors.
- Future Growth Potential: The energy drink market is projected to grow at an 8% CAGR through 2033, with Celsius holding a 20% market share, and the acquisitions are expected to strengthen its market position.
- Investment Opportunity Emerges: Although integration may cause short-term volatility, Celsius's forward P/E of 22 and a PEG ratio of just 0.34 indicate long-term investment value, with Wall Street's price target of $69 suggesting a 102% upside.
See More
Celsius Acquires Rockstar and Alani Nu Amid Stock Decline
- Acquisition Impact: Celsius Holdings' acquisition of Rockstar Energy and Alani Nu resulted in a 117% year-over-year revenue increase to $722 million in 2025, demonstrating the positive revenue impact of the acquisitions, although full-year earnings per share dropped 44% to $0.25 due to acquisition costs, highlighting short-term integration challenges.
- Market Reaction: Despite Celsius exceeding expectations in its Q4 2025 earnings report, its stock price fell 25% due to high valuation and integration uncertainties, with the P/E ratio soaring to 381 by the end of 2025, intensifying investor concerns about future profitability.
- Earnings Outlook: Management anticipates that gross profit margins will rebound to the low 50% range after the integration is completed in the first half of 2026, with the current margin at 47.4%, indicating a potential recovery in profitability that could attract long-term investor interest.
- Market Share and Growth Potential: Following the acquisitions, Celsius holds a 20% market share and is expected to benefit from an 8% compound annual growth rate in the energy drink market over the coming years, suggesting a favorable long-term outlook despite short-term integration and geopolitical risks.
See More
Analysis of Market Impact from Iran War
- Surging Oil Prices: The ongoing Iran war has led to a significant increase in global oil prices, with approximately 20% of the world's oil passing through the Strait of Hormuz, resulting in an overall market decline and expected long-term economic impacts.
- Extended Rebuilding Timeline: The reconstruction of LNG assets is projected to take 3-5 years, and if the conflict persists, this timeline may extend further, posing greater challenges to the global economy.
- Supply Chain Complexity: The current issues are more complex than mere supply shortages, particularly with Qatar's LNG facilities damaged, leading to uncertain recovery times that could affect production across multiple industries.
- Investor Sentiment Deterioration: The S&P 500 has dropped about 4% year-to-date, with the fear and greed index falling to 17, indicating a heightened fear among investors regarding future market conditions, which may lead to increased market volatility.
See More
Celsius Shares Rise 4.5% After Upgrade by Deutsche Bank
- Rating Upgrade Impact: Deutsche Bank upgraded Celsius from Hold to Buy, citing a recent 33% stock decline as an overreaction to new competition, with Costco expected to account for only 10% of 2025 sales, thereby boosting market confidence in the stock.
- Price Target Adjustment: Despite the upgrade, Deutsche Bank lowered its price target from $56 to $44, reflecting a cautious stance on market competition, while TD Cowen reiterated a Buy rating, viewing the recent pullback as excessive.
- Market Volatility: Celsius shares have experienced 25 moves greater than 5% over the past year, and today's rise indicates that the market considers this news significant, though it does not fundamentally alter perceptions of the business, highlighting investor caution.
- Long-term Investment Returns: Although Celsius is down 25.5% year-to-date, investors who bought $1,000 worth of shares five years ago would now see their investment worth $2,220, demonstrating potential long-term gains despite short-term challenges.
See More
