Why Celsius Holdings Stock Fell 11.5% in October

What happened

Shares of Celsius Holdings (NASDAQ:CELH), a maker of caffeine-heavy energy beverages, fell 11.5% in October, according to data from S&P Global Market Intelligence. For context, the S&P 500 (including dividends) declined 2.7% last month.

The stock, however, has bounced back this month, gaining 18% in the first week of November. In 2020, shares are up a whopping 391% through Nov. 6, making it a top performer among consumer staple stocks. The broader market has returned 10.3% over this period. 

Six cans of Celsius beverages: two each marketed in the U.S., Nordic countries, and Asia.

Image source: Celsius Holdings.

So what

Celsius Holdings didn’t release any bad news that would account for its stock falling in October. We can attribute the stock’s decline last month to simply a pullback — or some investors taking some profits — after the stock ran up so rapidly. Shares of Celsius have been on a tear since taking off in May. 

The stock’s powerful 2020 performance has been fueled by the company’s robust growth. In the second quarter, Celsius’ revenue soared 86% year over year to $30 million, easily beating the $24.2 million Wall Street had expected. Net income landed at $1.6 million, or $0.02 per share, compared to a net loss of $1.5 million, or $0.03 per share, in the year-ago period. That result also sprinted by the analyst consensus estimate, which was a loss per share of $0.01.

CELH Chart

Data by YCharts.

Now what

Investors shouldn’t have long to wait for material news. Celsius is slated to release its third-quarter results on Thursday, Nov. 12, before the market open. Management plans to hold an analyst conference call that same day at 10 a.m. EST.

Wall Street is expecting earnings per share of $0.02 on revenue of $33 million. In the year-ago period, Celsius posted EPS of $0.03 on $20.4 million, so analysts are projecting that the bottom line will decline 33% while the top line increases 62% year over year.

 

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