Celsius Holdings: A Promising Investment in the Energy Drink Market

Unlocking Growth: The Celsius Holdings Advantage

Buckley Capital Advisors' Q2 2026 Insights

In their second-quarter 2026 investor letter, Buckley Capital Advisors shared their investment strategy, revealing strong portfolio gains. The firm achieved a 36.0% net return for the quarter and 29.7% year-to-date, outperforming the iShares Russell 2000 Value and iShares Russell 2000. Their approach involves reallocating capital from matured investments to those with improving fundamentals and attractive valuations, focusing on undervalued small and mid-cap companies with significant earnings potential.

Celsius Holdings: A Strategic Addition to the Portfolio

Buckley Capital has added Celsius Holdings, Inc. (NASDAQ:CELH) to its portfolio. Celsius Holdings specializes in developing, manufacturing, marketing, and distributing functional energy drinks across the United States and internationally. As of July 27, 2026, CELH's shares closed at $28.79, reflecting a one-month return of -1.67% and a 52-week decline of 39.31%, with a market capitalization of $7.36 billion.

Why Celsius Holdings Offers an Attractive Bet

Buckley Capital is drawn to Celsius Holdings for its low cyclicality and strong growth prospects within the energy drink industry, which is expanding at a high single to low double-digit rate. They anticipate CELH will at least maintain, if not increase, its market share. The firm notes that Monster Beverage, a key competitor, boasts a 31.5% EBITDA margin and has been a top performer over the last three decades, trading at 42 times its 2026 estimated earnings. In contrast, CELH trades at 19 times its 2026 estimated earnings and an even more attractive 12 times its estimated 2027 earnings, suggesting a significant valuation gap that is expected to close.

Addressing Short-Term Challenges and Future Tailwinds

Celsius Holdings is currently navigating a few short-term challenges that Buckley Capital believes will soon be resolved. One such issue is the need to streamline its product portfolio. While the Celsius brand has seen negative growth recently, the completion of SKU rationalization is expected to shift this trend, with remaining products anticipated to achieve double-digit growth. Additionally, CELH is set to significantly expand its distribution, with a projected 17% increase in shelf space over the next 6-12 months. Negotiations for this expansion are complete, and implementation is underway, with hardware installations being the primary remaining step. Furthermore, Red Bull's upcoming price increase of high single digits within the next nine months is expected to create an opportunity for CELH to follow suit, further boosting its revenue.

Investment Landscape and Comparative Opportunities

Despite its potential, Celsius Holdings is not among the top 40 most popular stocks favored by hedge funds. In the first quarter, 52 hedge funds held CELH, a slight decrease from 56 in the previous quarter. While acknowledging CELH's investment merit, Buckley Capital also suggests that certain AI stocks offer greater upside and lower downside risk, especially those poised to benefit from Trump-era tariffs and onshoring trend