• Wondering if Celsius Holdings at around US$35.59 is a bargain or already pricing in a lot of optimism? This article walks you through the key signals behind the current price.
• The stock has had a choppy spell, with a 17.2% decline over the last 7 days, a 29.8% decline over 30 days, and a 25.5% decline year to date, even though the 1 year return sits at 1.3% and the 3 year and 5 year figures are 16.8% and a very large gain respectively.
• Recent coverage has focused on Celsius Holdings as a high profile name in the beverages space, with attention on how the brand fits into consumer trends and competition. This context has kept the stock in the spotlight as investors reassess how much they are willing to pay after the recent pullback.
• Celsius Holdings currently has a valuation score of 3 out of 6. The sections that follow compare different valuation approaches to that score, and then conclude with a way to think about value that goes beyond the usual ratios and models.

Approach 1: Celsius Holdings Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a business could be worth by projecting future cash flows and then discounting them back to today using a required return. It focuses on the cash the company may generate for shareholders over time rather than just current earnings.

For Celsius Holdings, the DCF uses a 2 Stage Free Cash Flow to Equity model based on cash flow projections. The latest twelve month free cash flow sits at about $322.2 million. Analyst inputs and extrapolated estimates point to forecast free cash flow of $373.1 million in 2026 and $683.0 million by 2028, with further projections reaching $1,159.6 million by 2035, all in US$ terms. These future figures are discounted back to arrive at an estimated intrinsic value of about $88.62 per share.

Compared with the recent share price around $35.59, the model implies the stock trades at roughly a 59.8% discount to this DCF estimate. On this metric alone, the shares appear materially undervalued.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Celsius Holdings is undervalued by 59.8%. Track this in your watchlist or portfolio, or discover 61 more high quality undervalued stocks.

Approach 2: Celsius Holdings Price vs Earnings

For a profitable company, the P/E ratio is a useful way to gauge how much you are paying for each dollar of earnings. Investors typically accept a higher or lower P/E depending on what they expect for future growth and how risky those earnings appear to be, so a "fair" P/E should reflect both opportunity and uncertainty.

Celsius Holdings currently trades on a P/E of about 143.3x. That is well above the Beverage industry average of around 16.6x and also above the peer group average of about 39.6x. Simply Wall St’s Fair Ratio for Celsius Holdings is 28.5x, which is its proprietary estimate of an appropriate P/E given factors such as earnings growth profile, industry, profit margins, market cap and company specific risks.

This Fair Ratio is more tailored than a simple comparison with peers or the wider industry because it is built around the company’s own fundamentals rather than broad group averages. When comparing the current P/E of 143.3x with the Fair Ratio of 28.5x, the shares appear to be trading at a richer multiple than the model suggests.

Result: OVERVALUED

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Upgrade Your Decision Making: Choose your Celsius Holdings Narrative

Earlier it was mentioned that there is an even better way to understand valuation. Narratives take center stage as an easy tool on Simply Wall St’s Community page, where you connect your view of Celsius Holdings’ story with a specific forecast for revenue, earnings, margins and a Fair Value that you can compare directly with today’s price.

A Narrative is simply your version of the Celsius Holdings story written into numbers. For example, one investor might align with the higher Fair Value of about US$85.00 that assumes stronger revenue growth and higher margins. Another might sit closer to the lower Fair Value of roughly US$46.88 that reflects more modest assumptions and a lower future P/E. Both of these views are stored, visible and automatically updated when new results or news arrive, so you can keep asking a clear question: does your chosen Fair Value still make sense relative to the current price?

Do you think there's more to the story for Celsius Holdings? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.