A company’s growth can tell investors a lot. Companies that grow their earnings at a high rate over long periods of time typically deliver superior returns to the broader market.
And with such solid revenue growth, the energy drink maker’s stock price has also risen. Celsius Holdings (NASDAQ:CELH) and emerging cosmetics brands elf beauty (NYSE:ELF) Compared to last year, they increased by 80% and 140%, respectively. Here’s what’s fueling these companies’ momentum and why I wouldn’t hesitate to buy the stock right now.
Celsius Holdings
The emerging beverage brand Celsius is pepsico Gain market share in the $159 billion energy drinks market. Strong demand for the company’s products has fueled its previously rapid expansion. monster beverage Over the past 20 years, inventory has increased by more than 50,000%.
Celsius started as a pre-workout nutritional supplement more than a decade ago, but has now expanded its presence across retail stores thanks to PepsiCo. The companies have an agreement in which PepsiCo will become the company’s primary distribution supplier in 2022, and Celsius plans to begin international expansion in Canada this quarter, which could open the floodgates for further growth. .
Celsius’ focus on “better” marketing sets it apart from industry leaders like Monster Energy and Red Bull. We make drinks that help with weight loss and are free of sugar and artificial ingredients. This approach resonated with consumers, with sales increasing 104% year over year in his first nine months of 2023.
Management sees great potential for the brand over the next five years, which justifies the stock’s high price. Expected price/earnings ratio (PER) The company’s growing market share in the huge energy drinks market should push the stock to new highs in the coming years and beyond.
elf beauty
Another fast-growing consumer brand is elf Beauty. The company is an emerging leader in the $600 billion personal care and beauty market. Elf’s stock price has risen 140% in the past 12 months, hitting a new all-time high thanks to the latest management update.
After posting three consecutive quarters of at least 75% revenue growth last year, the third quarter of fiscal 2024 (ending Dec. 31) saw revenue increase by 85%. During the same period, Elf also acquired skincare brand Naturium for his $333 million, expanding growth opportunities for the company.
The acquisition of Naturium is part of management’s plan to leverage the brand’s momentum in skin care, where Elf is already growing approximately 10 times faster than its competitors.
In the cosmetics space, Elf continues to achieve big wins through its partnership with. the goal, its value-priced products outperform established cosmetic brands. Management is focused on replicating the targeting strategy with other retailers.
Although the company’s forward P/E ratio is high at 59 times, the company’s impressive performance provides a strong rationale for its stock price.Analysts have raised their growth forecasts and now income It is expected to grow by more than 30% annually over the next 3-5 years. Even if the stock reaches new highs, there’s enough fuel in the tank for Elf to deliver market-beating returns.
Should you invest $1,000 in Celsius now?
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John Ballard I have positions in Celsius and Elf Beauty. The Motley Fool has positions in and recommends Celsius, Monster Beverage, Target, and elf Beauty. The Motley Fool has Disclosure policy.
Two skyrocketing stocks you should buy right away without hesitation Originally published by The Motley Fool
