Elliot Turner of RGA Investment Advisors presented his in-depth investment thesis on Celsius Holdings (US: CELH) at Best Ideas 2026.
Thesis summary:
Celsius is a differentiated brand in the energy drink category, distinguished by a “better-for-you” value proposition that appeals to health-conscious consumers and fitness enthusiasts. Unlike incumbents Red Bull and Monster, which cultivate “extreme sports” or “blue collar” identities, Celsius focuses on functional energy with zero sugar and proprietary ingredients, a positioning that has successfully expanded the total addressable market by attracting women and former coffee drinkers who historically rejected the category. The recent acquisition of Alani Nu transforms the business into a diversified holding company, adding a complementary, female-centric brand known for viral social media marketing and a high-velocity limited-time offer (LTO) strategy that drives strong customer recurrence.
The core growth algorithm is predicated on category expansion rather than merely capturing market share from legacy players. Elliot notes that while the U.S. energy drink market is projected to grow in the mid-single digits, Celsius and Alani Nu are poised to outpace this by targeting the $100 billion coffee market, where consumers spend 3-4x more annually than on energy drinks. The integration of Alani Nu into the PepsiCo distribution network acts as a primary catalyst, providing “rocket fuel” for the brand by expanding its presence from mass retailers like Target into high-frequency channels such as convenience stores, where it is currently under-penetrated.
Operationally, the thesis acknowledges the friction caused by the transition to the PepsiCo distribution system, specifically inventory destocking that temporarily compressed top-line growth and weighed on the stock price. However, Elliot views these issues as transitional “growing pains” rather than structural defects, noting that scanner data indicates improving sell-through trends. The partnership with PepsiCo, which owns an approximate 11% stake in the company, solidifies Celsius as the “category captain” within the Pepsi system, a status reinforced by the appointment of a former Pepsi executive as COO to improve supply chain coordination and data sharing.
Beyond domestic expansion, international markets represent a substantial, largely unpriced call option for the business. While competitors like Monster generate roughly 40% of their revenue internationally, Celsius currently derives only about 5% from outside the US, offering a long runway for growth as it leverages global partners like Suntory. Additionally, the company maintains a robust balance sheet with a net cash position and has authorized a $300 million share repurchase program, signaling management’s intent to take advantage of price dislocations and allocate capital efficiently as the business matures.
Regarding valuation, the shares recently traded at approximately 17x forward EBITDA, a level Elliot describes as compelling for a company with this growth profile. This multiple sits at the low end of Monster’s historical ten-year trading range of 17x to 25x, despite Celsius growing at a faster rate than Monster did during comparable periods. With gross margins expected to expand from roughly 50% toward the mid-to-high 50s and free cash flow projected to approach $1 billion, the thesis models an annualized IRR of nearly 17% over a five-year horizon.
Disclaimer
Best Ideas 2026 is held from January 6-23, 2026. The content of this website is not an offer to sell or the solicitation of an offer to buy any security. The content is distributed for informational purposes only and should not be construed as investment advice or a recommendation to sell or buy any security or other investment, or undertake any investment strategy. There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information set forth on this website. BeyondProxy’s officers, directors, employees, and/or contributing authors may have positions in and may, from time to time, make purchases or sales of the securities or other investments discussed or evaluated herein.
Slides
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