TenQ

The Celsius story

Celsius owns the CELSIUS, Alani Nu and Rockstar energy drink brands, with the central question of whether PepsiCo distribution and acquisition integration can strengthen margins while restoring growth at CELSIUS.

Written from Celsius's own filings with the SEC, and rewritten when it publishes a new earnings release. Updated 2026-09-30.

  • $28.00share price, last close
  • $7.1Bmarket value
  • 20/36TenQ Score checks passed
  • 4.2%growth a year the price assumes

The story in brief

  • Acquisitions reshape growth. In the quarter to June 2026, Alani Nu generated $364.4 million in sales and Rockstar contributed $66.5 million, while CELSIUS brand revenue decreased 11.7%.
  • Margins remain pressured. Gross margin fell to 48.1% in the quarter to June 2026 from 51.5% a year earlier, reflecting higher promotional activity and channel mix.
  • Cash exceeds earnings. Over the last twelve months, Celsius generated $463 million in free cash flow alongside $35 million in stock-based pay, despite a net margin of 4.2%.

What drives the business

  • Celsius has expanded from its namesake energy drink into a portfolio that includes Alani Nu and Rockstar, with PepsiCo serving as the primary distributor for all these brands in the United States and Canada.
  • Its long-term Captaincy arrangement with PepsiCo establishes jointly developed sales, placement and promotional priorities, while sales to PepsiCo accounted for 43.2% of revenue in 2025.
  • PepsiCo agreed to reimburse up to $275.0 million of former Alani Nu distributor termination fees, with those funds restricted to settling the associated obligations.
  • Alani Nu's $364.4 million in sales in the quarter to June 2026 benefited from consumer demand, increased customer orders during the PepsiCo transition and the Purple Cotton Candy launch, while Rockstar contributed $66.5 million following its integration.
  • Portfolio revenue reached $817.9 million in the quarter to June 2026, an increase of 10.6%, while Alani Nu retail sales grew 55.7% over the 13-week period ended June 28, 2026.

What the price assumes

At $28.00, the reverse DCF implies free cash flow after stock-based pay grows 4.2% a year for ten years, using a 10.2% discount rate.

That compares with delivered annual growth of 55.0% over the last three fiscal years and the TenQ check's 29.5% bar, which slows that record halfway toward 4%.

The cash growth assumption sits below that bar, but the earnings yield of 1.8% trails the 5.2% Treasury yield used in the TenQ check.

Value CELH on your own assumptions

What could change the story

  • CELSIUS brand revenue decreased 11.7% in the quarter to June 2026, reflecting promotional spending, shipment timing, club channel softness and assortment changes, so portfolio expansion has not yet resolved weakness in the namesake brand.
  • Rockstar retail sales decreased 13% over the 13-week period ended June 28, 2026, showing that completing integration does not itself establish consumer growth.
  • Rising commodity costs, primarily aluminum, partially offset integration savings, while the last twelve months' operating margin of 5.3% fell below the sector comparison of 11.0% in the TenQ check.
  • Total debt of $675 million sits against $631 million in cash and short-term investments, and interest coverage of 2.95 falls below the TenQ check's 5.00 bar.

What to watch next

  • Management expects freight optimization, raw material alignment and changes to pricing, pack sizes and mix to support margin expansion over the remainder of 2026, making progress from the quarter to June 2026 gross margin of 48.1% a key measure.
  • The next releases can show whether CELSIUS cooler placements and shelf space gains translate into stronger retail sales after a 2% decline over the 13-week period ended June 28, 2026.
  • Alani Nu's retail growth and reported revenue will help distinguish sustained consumer demand from the increased orders associated with its PepsiCo distribution transition.

Sources

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