Celsius Holdings Inc. (CELH) shares took a nosedive on Monday, reaching new 52-week lows as the company continues to grapple with slowing growth. The stock has lost nearly 47% of its value since the beginning of the year. The beverage company’s stock initially soared at the start of the year, but the momentum quickly faded as weaker consumer spending trends began to impact discretionary products. Celsius, in particular, has faced challenges with declining market share, a direct consequence of softening demand.
According to a Barron’s report, Celsius experienced sales growth exceeding 50% at the start of the year but has seen that figure dwindle to around 10% in the current quarter. This slowdown in growth has mirrored the stock’s recent performance, with several analysts lowering their price targets or issuing downgrades. Piper Sandler and Roth MKM are among the latest analysts to adjust their outlooks, with Piper cutting its target to $47 and Roth MKM trimming theirs to $43 near the end of September.
Adding fuel to the fire, last month, the selloff in Celsius shares accelerated after the company revealed that PepsiCo Inc. (PEP) would be reducing its orders by approximately $100 million to optimize its inventory. This move by PepsiCo further amplified concerns about Celsius’s future prospects.
Despite the recent decline, Celsius shares have drawn significant attention across various social media platforms, particularly on Stocktwits, where the stock was among the top trending names on Monday. This suggests that some traders are attempting to catch a bounce as shares have dropped nearly 10% over the past week. However, the stock’s current price is well below its 50-day moving average of around $36.98.
In an attempt to boost its product line, Celsius announced the launch of two new flavors under its Celsius Essentials line: Watermelon Ice and Grape Slush. These new flavors are anticipated to be available in early 2024, and the company will be showcasing them at the NACS 2024 trade show. To generate further excitement, MMA fighter Dustin Poirier will be hosting a fan meet and greet at Celsius’s booth.
Celsius Holdings closed Monday’s trading session down 4.73% at $28.82, marking a new 52-week low. The stock’s 52-week high stands at $99.61. The company’s struggles highlight the challenges facing many discretionary consumer goods companies as consumers grapple with inflation and tightening budgets.
