If you invested in Celsius Holdings(NASDAQ: CELH) stock five years ago, then you're probably not reading this article -- you're probably sitting on a beach somewhere, sipping on a nice cold Celsius Sparkling Orange or Fantasy Vibe and enjoying your good investing fortunes. After all, a $10,000 investment five years ago is worth more than $560,000 today.
Celsius stock is up for the right reason: Business is absolutely booming. Just check out the chart below of its annual revenue growth.
| Metric | 2019 | 2020 | 2021 | 2022 | 2023 |
|---|---|---|---|---|---|
| Revenue growth rate | 43% | 74% | 140% | 108% | 102% |
Data source: Celsius' annual filings. Chart by author.
This extraordinary compound annual growth rate has taken Celsius from revenue of $75 million in 2019 to revenue of $1.3 billion in 2023. But here's the thing: Most of this revenue comes from the U.S. market. According to the company's filings, roughly 96% of its 2023 revenue was from North America. And while it doesn't break out revenue from Canada, distribution is limited north of the border, meaning this is mostly U.S. revenue.
To be clear, Celsius still has room for growth in the U.S. and is pursuing certain opportunities. Its distribution deal with PepsiCo is particularly helpful, getting the upstart brand in the door with food-service companies, college campuses, hotels, healthcare facilities, and more.
That said, Celsius' distribution is much fuller now than it was five years ago and it will reach a saturation point eventually. And that's why this top growth stock is gearing up for international expansion in 2024 and beyond.
The international opportunity for Celsius
So far this year, Celsius has announced expansion plans for five international markets: Canada, the United Kingdom, Ireland, Australia, and New Zealand.
As mentioned, Celsius' distribution in Canada was previously quite limited. But its distribution partner Pepsi will help take the brand across the country and sales have already started. In the other four markets, Celsius will be working with Suntory -- a Japanese beverage giant with global operations. Sales in Europe will start soon and sales in Oceania are expected to begin in the fourth quarter of 2024.
Pepsi shows that international markets can be a big opportunity for Celsius. In 2023, around half of Pepsi's revenue of $91 billion came from international markets. Granted, Pepsi sells beverages, food, and snacks whereas Celsius only sells beverages. But the comparison still points to a strong growth opportunity for Celsius.
For those wanting a closer comparison for Celsius, there's Monster Beverage. For its part, Monster had net sales of $2.7 billion outside of the U.S. compared to total net sales of $7.1 billion.
Not only this, Monster grew its international net sales by $350 million in 2023. Therefore, Monster's international growth was six times the size of Celsius' entire international business.
I believe that this suggests a growth opportunity for Celsius in the very least. And it already has two giant partners in Pepsi and Suntory to help get it done.
What it means for investors
Investors could have a whole separate conversation about the valuation of Celsius stock and whether it's a timely buy now that it's already up 55% year to date. But my purpose here is to simply point out that investors haven't missed the boat yet with Celsius stock.
Celsius has experienced one of the most incredible compound annual growth rates I've ever seen. However, the company still has room to grow and it has the right partners to get it done. That counts for a lot and points to strong ongoing long-term growth for this booming beverage business.
Should you invest $1,000 in Celsius right now?
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Jon Quast has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Celsius and Monster Beverage. The Motley Fool has a disclosure policy.
