Celsius Stock Surges After Blowout Earnings and Pepsi Deal

Key Points

• Celsius Holdings is emerging as a standout retail growth story, boosted by record earnings and a deepened distribution partnership with PepsiCo that analysts may be undervaluing.
• Compared to Monster, Celsius offers more growth potential thanks to its smaller size, stronger earnings beat, and surging U.S. energy drink market share.
• Analyst upgrades, institutional buying, and declining short interest signal growing optimism, positioning Celsius to benefit from expected Fed rate cuts.

The retail sector has been making new headlines recently, especially as it has now outperformed the S&P 500 index by triple digits over the past month alone.

While some point to the Federal Reserve’s anticipated September 2025 rate cut as the driving force, a more compelling catalyst is gaining traction: the overlooked strength of niche consumer growth stories.

As semiconductor and artificial intelligence (AI) stocks continue to have most of the market’s attention (and capital), others have been left behind by such a wide margin that it is now hard to ignore these names moving forward, as they could very well catch up and reach new highs of their own.

Among them, Celsius Holdings Inc. NASDAQ: CELH has emerged as a high-potential play in the health-forward energy drink category.

Despite a record-breaking quarter and a game-changing distribution deal with PepsiCo NASDAQ: PEP, the market has yet to fully price in the company’s growth trajectory. That disconnect presents an opportunity investors shouldn’t ignore.

Celsius vs. Monster: Peer Review

In terms of price action, Celsius now trades at 92% of its 52-week high, not far behind one of its competitors, Monster Beverage Corp. NASDAQ: MNST, which sits at 94%.

However, one big differentiator between these two is that Celsius is much smaller. And size does matter, as smaller companies typically have more room to grow. It would be much easier for Celsius to go from its current market capitalization of nearly $15 billion to $20 billion (33% upside) than for Monster’s $62 billion to deliver the same growth on a percentage basis.

This growth potential is already reflected in valuation multiples. Celsius trades at a forward price-to-earnings (P/E) ratio of 62.5x, compared to Monster’s nearly 39x.

Value investors might consider this overextended and unattractive. However, growth-focused investors know that the market will often pay up for names it believes can outperform their peers and the broader S&P 500, especially after a blowout earnings season. 

In Q2 2025, Celsius reported revenue of $739 million—up 84% year-over-year, crushing estimates by nearly $90 million—and an earnings per share (EPS) of $0.47, more than double the $0.23 analyst estimate. Also, market share surged to 17.3% of the U.S. energy drink market, driven by both core Celsius and its fast-growing Alani Nu brand.

Monster, on the other hand, delivered an EPS of $0.52, beating analyst expectations of $0.48, but Celsius’s 100% beat shows it’s operating on another level.

PepsiCo Deal: The Game-Changer Wall Street Is Underpricing

On top of the earnings beat, Celsius secured a strategic win: a $585 million investment from PepsiCo, increasing Pepsi’s stake to 11% and deepening its role as a distribution partner for Celsius, Alani Nu, and Rockstar across North America.

This partnership dramatically expands Celsius’s logistical reach and retail penetration—factors Wall Street often underestimates until the numbers hit earnings reports. It also adds institutional credibility, which could drive additional fund allocations and support from analysts.

Analyst Sentiment Is Rising, but the Market Hasn’t Fully Caught On

Following such a significant increase in EPS, it should come as no surprise to investors that some Wall Street analysts are revising their ratings for Celsius stock. 

Bill Chappell from Truist Financial and Gerald Pascarelli from Needham & Co. see Celsius as a Buy. Both analysts have assigned the stock a $70 price target, implying an attractive 25% upside potential from today’s prices and a new 52-week high.

Meanwhile, AllianceBernstein increased its position by 3.4% in mid-August. The firm now owns 7.2% of Celsius stock, which is worth $865.8 million. Not only was momentum involved in this decision, but also the likely expectation of better earnings power to come in the future.

Even bearish traders are starting to think the juice is not worth the squeeze. Over the past month, short interest has declined by 4.1%. This early sign of bearish capitulation further validates the growing optimism among institutions and analysts alike.

Consumer Stocks Stand to Win from Fed Cuts

If the Fed follows through with rate cuts, consumer discretionary stocks could benefit from increased spending power. Celsius sits at the perfect intersection of health, energy, and lifestyle—exactly the kind of brand consumers rally behind during bullish cycles.

While valuation is a valid concern, Celsius has proven it can deliver exceptional growth. For investors looking beyond the tech trade, this retail sleeper stock might be the breakout star of the next leg up.