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Celsius Holdings, Inc. Beat Analyst Estimates: See What The Consensus Is Forecasting For Next Year

Simply Wall St
·4 min read

As you might know, Celsius Holdings, Inc. (NASDAQ:CELH) just kicked off its latest quarterly results with some very strong numbers. It was a solid earnings report, with revenues and statutory earnings per share (EPS) both coming in strong. Revenues were 12% higher than the analysts had forecast, at US$37m, while EPS were US$0.06 beating analyst models by 200%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Celsius Holdings

earnings-and-revenue-growth
earnings-and-revenue-growth

Following the latest results, Celsius Holdings' four analysts are now forecasting revenues of US$170.6m in 2021. This would be a substantial 43% improvement in sales compared to the last 12 months. Per-share earnings are expected to bounce 38% to US$0.11. Before this earnings report, the analysts had been forecasting revenues of US$164.2m and earnings per share (EPS) of US$0.16 in 2021. While next year's revenue estimates increased, there was also a large cut to EPS expectations, suggesting the consensus has a bit of a mixed view of these results.

Curiously, the consensus price target rose 27% to US$33.50. We can only conclude that the forecast revenue growth is expected to offset the impact of the expected fall in earnings. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Celsius Holdings at US$40.00 per share, while the most bearish prices it at US$25.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We can infer from the latest estimates that forecasts expect a continuation of Celsius Holdings'historical trends, as next year's 43% revenue growth is roughly in line with 38% annual revenue growth over the past five years. Compare this with the wider industry, which analyst estimates (in aggregate) suggest will see revenues grow 6.5% next year. So although Celsius Holdings is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Celsius Holdings. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Celsius Holdings going out to 2023, and you can see them free on our platform here.

Before you take the next step you should know about the 4 warning signs for Celsius Holdings that we have uncovered.

This article by Simply Wall St is general in nature. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.

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But that argument misses the point. Yes, there are short-term pressures facing Exxon Mobil. Those aren’t the only pressures, however. In fact, there’s one core problem for Exxon Mobil: the world has changed. And it’s going to be difficult, if not impossible, for this oil giant to adapt. The Fundamental Case for XOM Stock If you look at the numbers, there’s a case to be made for XOM stock. One number to start with is $40. That’s the current per-barrel price of West Texas Intermediate crude. In 2019, on average, Exxon Mobil realized a price of $56.32 per barrel, according to its Form 10-K filing with the U.S. Securities and Exchange Commission. The year before, it was nearly $63. 7 Long-Term Stocks to Buy with the Election Behind Us The impact on earnings is staggering. Per that filing, a $1 move in the weighted-average realized crude price would increase Exxon’s after-tax profit by $475 million. That’s about 11 cents per share. So if (or when) crude bounces back, so will Exxon earnings … and in a big way. The second number is 9.9. That’s the dividend yield generated by XOM stock at the moment (in percentage points, obviously). Meanwhile, management has committed to the payout. And the two numbers can work together. A rebound in crude prices not only boosts earnings, but it puts the continued speculation about a dividend cut to bed. That means investors keep their income, and XOM stock likely gets a boost as well. In that scenario, Exxon can be a big winner. Beyond the Numbers That argument seems to make sense, but I believe it has a critical flaw. It is based on the idea that XOM stock has sold off because crude prices have plunged this year. And that’s simply not the entire story. After all, Exxon still has a market capitalization around $150 billion. It’s big institutional investors who move the stock — and they’re not selling (or putting off buying) the stock because of the size of the dividend. They’re not selling because oil futures went negative in April, or because WTI crude is at $40 at the moment. If they believed that crude was heading back to $60-plus once normalcy returned, they’d be buying XOM stock with both fists. They’re not doing that. And I’d bet that’s because a lot of those big investors indeed are taking the long view. That view can be summarized with a simple question: Can Exxon Mobil grow over time? And increasingly, the answer seems to be “no.” Electric vehicle adoption clearly is going to rise. We’ve seen stocks ranging from manufacturers to suppliers, in the U.S. and elsewhere, simply take off this year. That in turn suggests lower gasoline demand, which pressures Exxon’s upstream (exploration) and downstream (retail) businesses. Chemical demand probably bounces back to some extent, but there’s a shift away from plastics and other oil derivatives. Even natural gas demand probably goes lower over time thanks to renewable growth. Growth Without Growth There really isn’t any part of Exxon Mobil’s business that is untouched by changing demand trends. Those trends didn’t begin in 2020, and they’re not going to end in 2021. If anything, the changes have been accelerated at least in part by the pandemic. And that’s an enormous problem for XOM stock. It’s not impossible for a stock to grow if demand doesn’t; investors call those cases “melting ice cubes.” But there haven’t been too many successful melting ice cubes in recent years. And I’d wager there’s never been a melting ice cube with a market capitalization of $150 billion. Once a business peaks, the stock is going to run into trouble. And so from here, the 2020 trading in XOM stock looks like a realization by the market that the business indeed has peaked. That view suggests that XOM stock has fallen not because investors are distracted by shiny growth stocks, but because they’re correctly focused on a very difficult and dangerous path ahead. On the date of publication, neither Matt McCall nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in the article. More From InvestorPlace Why Everyone Is Investing in 5G All WRONG Top Stock Picker Reveals His Next 1,000% Winner Radical New Battery Could Dismantle Oil Markets The post The Future for Exxon Mobil Stock Is Just As Bleak As It Looks appeared first on InvestorPlace.

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