Celsius Holdings: Alani Nu Acquisition Masking Growth Challenges (Rating Downgrade)
Summary
- Celsius shares have surged 50% YTD, but fundamentals don't justify the rally, given continued revenue declines and margin pressure.
- Alani Nu acquisition is masking Celsius' core brand struggles, with growth expectations for both brands appearing overly optimistic.
- Valuation is stretched at 51x forward P/E, with significant downside risk if Alani Nu's growth slows or margins erode post-consolidation.
- Given competitive pressures and lofty expectations, I recommend investors trim or exit positions, downgrading Celsius to 'Hold'.
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