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The Best GenZ Stock? Why I Am Long Celsius
I am building a first position in the Nasdaq-listed, energy drink company Celsius Holdings $CELH (company website) and like to share my investment thesis below!
Company Overview
-
- Founded: 2004 (20-year history)
- Revenue: $1.3 billion in 2023
- Margins: Gross Margin 50%, Operating Margin 22%, Net Margin 20%, FCF Margin 16%
- Debt: The company is debt-free (!!)
- Market Share: 3rd best-selling energy drink in the U.S., after Red Bull and Monster
- USP: Zero sugar, caffeine-based energy drinks highly favored by GenZ
Favorite Energy Drinks By Generation
| Generation | Favorite Energy Drink |
|---|---|
| Baby Boomers (like Michael Jordan) | Coke |
| Gen X (like Robert Downey Jr or myself) | Red Bull |
| Millennials (like Taylor Swift) | Monster |
| Gen Z (Mr Beast) | Celsius |
Best Energy Drink Stocks
Celsius is the 2nd largest energy stock company in the U.S. (Red Bull as the largest is a private company).
But in terms of growth, it is leading by a wide margin (111% is actually due to PepsiCo’s overstocking, more realistic growth rate is 39-50%.
| Symbol | Company | M.Cap | Revenue |
3Yr Growth
|
| $MNST | Monster | 52.0b | 7.3b | 16.2 |
| $CELH | Celsius | 7.5b | 1.5b | 111.8 |
| $FIZZ | National Beverages | 4.3b | 1.2b | 3.6 |
| $BROS | Dutch Bros | 3.9b | 1.1b | 30.5 |
| $CAVA | Cava | 15b | 0.8b | 0 |
Company Overview
- Sales Growth – 50% YoY growth in sales and rapid growth
- Debt-Free – Strong financial position with zero debt
- PepsiCo $PEP owns an 8.5% stake, investing $550m in 2022; its massive distribution network is helping Celsius scale rapidly
- Expansion Plans: Celsius recently expanded into six additional countries in 2024 (not yet present in the EU or Asia!)
- Contributed 47% of all energy drink category growth in Q2 2024; holds #3 market share in the U.S. energy drink market at 11%
- Disclaimer: I am also long $PEP in my All-Weather Portfolio
What Makes Celsius The Best Gen Z Stocks?
1️⃣ Generation Z loves Celsius, check out the below Amazon’s “bestseller” page; out of the top 10 spots, Celsius takes 4!
2️⃣ Hyped – similar to when it was believed Taurin was in Red Bull, Gen Zs believes CELH has Ozempic in it, resulting in weight-loss
3️⃣ Dominating TikTok – TikTok and Instagram-friendly! With 2b views across both platforms (multiples more compared to e.g. Monster)
4️⃣ Mind Capture – Celsius successfully captured the consumer’s mind as the Generation’s energy drink – invaluable!
Fundamental Reasons To Buy
✅ Balance Sheet: $CELH is debt-free and makes money with healthy margins – no existential risks
✅ Strong Growth Potential: Despite the short-term price decline, I believe the fundamentals remain intact
✅ PepsiCo as a Key Partner: PepsiCo’s backing and distribution reach can continue to fuel Celsius’s growth
✅ Long-Term Play: Celsius is well-positioned to capture market share among younger consumers, especially Gen Z.
✅ Growth Potential: Celsius has not entered the European or Asian market; exciting room to grow
✅ Valuation: I believe the market has overreacted to short-term concerns, creating a compelling risk/reward opportunity.
Technical Chart Analysis Reasons To Buy
Now that we know the fundamental story of the company is looking good to excellent, let’s take a quick look at its stock chart.
- The stock is beaten down by 67% from its all-time high.
- It recently managed to climb above its 21-day EMA (exponential moving average)
- There is a gap on the daily at $30.50 – $31 which I hope it will fill
So, How To Trade The Best Gen Z Stock?
Here is my trade setup:
- I bought a first position of 300x shares at $34
- I am waiting for the price to come down to $30.55 to fill the gap
- I placed a 2nd purchase order at that price level ($30.55)
- Once it reaches $55, I will sell 50%
- Once it reaches $68, I will sell the remaining 50%
As always, this is not financial advice. I am only sharing what I do. Please do your own research.
📘 Read Also
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- How to Invest in Asia – The 5 Best Asian Stocks To Buy
- The Family Bank: Secure Your Family’s Financial Future
FAQ
What are the best Gen Z stocks to invest in right now?
Some of the best Gen Z stocks include companies like Celsius energy drinks, Tesla or Shopify. These companies are known for their innovation, sustainability efforts, and alignment with Gen Z values. It’s important to research each stock and consider how it fits your investment strategy before buying.his question addresses the desire to find top-performing stocks favored by Gen Z investors.
How can Gen Z start investing in the stock market?
Gen Z can start investing by opening a brokerage account through platforms like Robinhood, E*TRADE, or Fidelity. It’s advisable to begin with a budget, educate yourself about the stock market, and consider investing in low-cost index funds or ETFs before picking individual stocks.
What sectors are popular among Gen Z investors?
Popular sectors among Gen Z investors include technology, renewable energy, health and wellness, and entertainment. These sectors resonate with their values, focusing on innovation, sustainability, and personal well-being.
Why is sustainable investing important to Gen Z?
Sustainable investing is important to Gen Z because they prioritize environmental and social responsibility. They want their investments to reflect their values, supporting companies that promote sustainability and ethical practices, which can contribute to positive change in the world.
What platforms do Gen Z prefer for stock trading?
Gen Z tends to prefer user-friendly trading platforms like Robinhood, Webull, and SoFi, which offer mobile apps, no commission fees, and educational resources. These platforms cater to their tech-savvy nature and desire for convenient access to the stock market.
What is the best Gen Z stock?
According to the author of this article, a veteran investor with +30 years of experience, the best Gen Z stock at the moment is Celsius Holdings (CELH).
Health and Wellness Focus: Celsius offers fitness drinks and supplements that align with Gen Z’s growing interest in health, wellness, and active lifestyles.
Innovative Product Line: The brand continuously introduces new flavors and formulations, appealing to young consumers who seek variety and novelty in their beverages.
Strong Social Media Presence: Celsius effectively engages with Gen Z through social media marketing, leveraging influencers and digital campaigns to build brand loyalty.
Sustainability Initiatives: The company emphasizes sustainability in its operations and packaging, resonating with Gen Z’s values regarding environmental responsibility.
Growth Potential: Celsius has shown impressive revenue growth and market expansion, making it an attractive investment option for young investors looking for promising stocks in emerging markets.
Age when reaching FI: 40 in 2018
Left the rat race: May 2017
Living in: Singapore
Number of kids: 2
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