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Celsius (CELH) Reliance on International Sales: What Investors Need to Know

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Have you evaluated the performance of Celsius Holdings Inc.'s (CELH - Free Report) international operations during the quarter that concluded in March 2024? Considering the extensive worldwide presence of this company, analyzing the patterns in international revenues is crucial for understanding its financial resilience and potential for growth.

In the current era of a tightly interconnected global economy, the proficiency of a company to penetrate international markets significantly influences its financial health and trajectory of growth. For investors, the key is to grasp how reliant a company is on overseas markets, as this provides insights into the durability of its earnings, its ability to exploit different economic cycles, and its overall growth capabilities.

Being present in foreign markets serves as protection against local economic declines and helps benefit from more rapidly expanding economies. Yet, such expansion also introduces challenges related to currency fluctuations, geopolitical uncertainties and varied market behaviors.

Upon examining CELH's recent quarterly performance, we noticed several interesting patterns in the revenue generated from its international segments, which are commonly analyzed and observed by Wall Street experts.

The company's total revenue for the quarter amounted to $355.71 million, marking an increase of 36.8% from the year-ago quarter. We will next turn our attention to dissecting CELH's international revenue to get a clearer picture of how significant its operations are outside its main base.

Decoding CELH's International Revenue Trends

During the quarter, Europe contributed $14.14 million in revenue, making up 4.0% of the total revenue. When compared to the consensus estimate of $11.9 million, this meant a surprise of +18.84%. Looking back, Europe contributed $12.12 million, or 3.5%, in the previous quarter, and $8.65 million, or 3.3%, in the same quarter of the previous year.

Other International generated $1.38 million in revenues for the company in the last quarter, constituting 0.4% of the total. This represented a surprise of -32.07% compared to the $2.03 million projected by Wall Street analysts. Comparatively, in the previous quarter, Other International accounted for $1.87 million (0.5%), and in the year-ago quarter, it contributed $1.48 million (0.6%) to the total revenue.

Asia accounted for 0.2% of the company's total revenue during the quarter, translating to $0.68 million. Revenues from this region represented a surprise of -57.94%, with Wall Street analysts collectively expecting $1.61 million. When compared to the preceding quarter and the same quarter in the previous year, Asia contributed $0.64 million (0.2%) and $1.26 million (0.5%) to the total revenue, respectively.

Revenue Projections for Overseas Markets

The current fiscal quarter's total revenue for Celsius, as projected by Wall Street analysts, is expected to reach $431.69 million, reflecting an increase of 32.5% from the same quarter last year. The breakdown of this revenue by foreign region is as follows: Europe is anticipated to contribute 5% or $21.74 million, Other International 0.5% or $2.14 million and Asia 0.5% or $2.05 million.

Analysts expect the company to report a total annual revenue of $1.74 billion for the full year, marking an increase of 31.7% compared to last year. The expected revenue contributions from Europe, Other International and Asia are projected to be 4.8% ($83.07 million), 0.5% ($8.52 million) and 0.4% ($6.06 million) of the total revenue, in that order.

The Bottom Line

Celsius' reliance on international markets for revenues offers both opportunities and risks. Hence, keeping an eye on its international revenue trends could significantly help forecast the company's prospects.

In an era of growing international ties and escalating geopolitical disputes, financial analysts on Wall Street pay keen attention to these developments to fine-tune their earnings estimations for businesses operating across borders. It's important to note, however, that a range of additional variables, like a company's local market status, also play a crucial role in shaping these forecasts.

Here at Zacks, we put a great deal of emphasis on a company's changing earnings outlook, as empirical research has shown that's a powerful force driving a stock's near-term price performance. Quite naturally, the correlation is positive here -- an upward revision in earnings estimates drives the stock price higher.

The Zacks Rank, our proprietary stock rating tool, comes with an externally validated impressive track record. It effectively utilizes shifts in earnings projections to act as a dependable barometer for forecasting short-term stock price trends.

Celsius, bearing a Zacks Rank #3 (Hold), is expected to mirror the broader market's movements in the near term. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Celsius' Recent Stock Market Performance

Over the past month, the stock has seen an increase of 3.9% in its value, whereas the Zacks S&P 500 composite has posted an increase of 1.3%. The Zacks Consumer Staples sector, Celsius' industry group, has ascended 5% over the identical span. In the past three months, there's been an increase of 28.6% in the company's stock price, against a rise of 4.3% in the S&P 500 index. The broader sector has increased by 4.7% during this interval.

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