By Evie Liu

Celsius Holdings was a Barron's stock pick one year ago , when shares were trading at $32. At the time, the energy-drink company's stock was slumping over signs of slowing growth. We argued that the jitters were overblown -- and sure enough, the stock has nearly doubled since then.

Celsius makes healthier, sugar-free energy drinks that have quickly taken market share from major rivals like Red Bull and Monster Beverage thanks to its successful social media strategy that targets gym-goers and the health-conscious crowd.

The brand 's financial results plunged last year as PepsiCo, its major distributor in the U.S., reduced orders to adjust the amount of inventory it holds. This, along with worries that consumer spending weakness could hurt the energy drink sector as a whole, pressured the stock.

Red Bull and Monster Beverage are fighting to win back the lost market share, while beverage giants from Keurig Dr Pepper to Molson Coors Beverage are eyeing a piece in the energy drink market as well. The stock tumbled from nearly $100 in May 2024 to around $22 as of February.

But a rebound was on its way. Earlier this year, Celsius acquired smaller energy-drink company Alani Nu, a brand particularly popular among female consumers, for $1.8 billion. The move has already paid off and Celsius stock has been rising again.

In the second quarter, Celsius' total revenue jumped 84% from a year ago, while diluted earnings expanded by five cents to 33 cents per share, both exceeding the analyst expectations by a large margin.

The growth was largely driven by Alani Nu, whose retail sales surged 129% year over year, marking one of the fastest accelerations in the category and underscores the brand's resonance with younger, more diverse consumers.

Revenue for the namesake Celsius energy drinks also increased 9% from a year ago, thanks to more distribution points and faster selling speeds. The numbers reflected "increasing consumer demand for sugar free, functional beverages," said the company.

Last week, PepsiCo said it's increasing its stake in Celsius to better align the two companies strategically. Celsius has acquired PepsiCo's Rockstar Energy brand, and Alani Nu will join the PepsiCo distribution system, which would make the brand more widely available.

Celsius stock is now at $61 per share, below its all-time high of nearly $100. Some Wall Street analysts believe there is still room to grow, but investors should be cautious from here. If you've bought the stock on our recommendation, it might be time to take some profit now.

Write to Evie Liu at evie.liu@barrons.com

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September 05, 2025 04:30 ET (08:30 GMT)

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