Artificial intelligence (AI) stocks have been a hot topic on Wall Street for quite some time now, and one clear winner has been AI chip giant Nvidia (NVDA). Shares of NVDA have generated a mouthwatering 19,437% return over the last decade. Beyond Nvidia, another handful of AI winners are emerging as the technology gains wider adoption – like new S&P 500 Index ($SPX) component Super Micro Computer (SMCI), now up by 6,463% over the past 10 years.
But while the massive share price gains racked up by AI stocks like Nvidia and Super Micro Computer have been garnering all the headlines, there is one under-the-radar stock that has outperformed both of these two over the past decade. Celsius Holdings (CELH), a maker of energy drinks, has vaulted from penny stock territory in this same time frame to its current perch around $88 per share, posting a 10-year return of 31,646% in the process. Here’s how much more upside Wall Street is expecting.
The Rise of Celsius Holdings
Celsius Holdings (CELH) is a manufacturer and distributor of functional beverages, foods, and other supplements. Marketing under the Celsius and FAST brands, they provide their customers with calorie-burning beverages, liquid supplements, protein bars, sports drinks, and more. Headquartered in Boca Raton, the company operates in the U.S., Canada, Asia-Pacific, Europe, and the Middle East.
CELH stock has rocketed 63% YTD, and is trading near its all-time highs.
Despite its outperformance, one reason stocks like Celsius Holdings might fly under the radar is because of its smaller market cap. Whereas Nvidia now lags only Microsoft (MSFT) and Apple (AAPL) in size, Celsius has a market cap of only $20 billion – less than one-third the current size of its former S&P MidCap 400 ($IDX) peer, Super Micro.
Blue Bird Corporation, a renowned school bus manufacturer, has recently made a notable move, catching the eyes of market players. In a technical twist, the stock surged past its 50-day simple moving average (SMA) - a crucial juncture for traders, heralding a promising short-term uptick.
Key Signals from Historical MovementsIntriguingly, this isn't the first time Blue Bird has crossed above the 50-day SMA. Earlier in the year, it made a similar breakthrough on May 3, maintaining the position until July 1. Despite a brief dip below the SMA in July, the stock reclaimed its territory yesterday. This rebound marks a positive trajectory for the company.
The Fundamental Strengths of Blue BirdDelving into Blue Bird's fundamentals, there are six notable reasons to be bullish on the stock:
Massive Market Opportunity: With a rich legacy spanning a century in crafting school buses, Blue Bird is leaping into the future with innovative advancements in automotive technology. The company's stronghold in the market, especially in the electric school buses segment, promises lucrative gains. Propane Advantage: Blue Bird doesn't just stop at electric buses; it also capitalizes on propane and gasoline, leveraging a strategic partnership to maintain its dominance in the alternative fuels domain. Favorable Government and Regulatory Policies: Riding on government initiatives promoting electric buses, Blue Bird stands to benefit from supportive policies paving the way for growth. Turnaround Efforts Paying Off: A resilient turnaround strategy post-pandemic hurdles has bolstered Blue Bird's financial health, propelling it towards profitability and enhanced operational efficiency. Expansion & Safety Initiatives: With a vision to scale up production and bolster safety protocols, Blue Bird is gearing up for an expansion spree, aligning with the escalating demand. Raised FY24 Guidance: Noteworthy revenue projections and an optimistic outlook underscore Blue Bird's confidence in its future performance.A Glance at Stocks in PerformanceBlue Bird's stock has had an impressive run this year, showcasing a robust 94% surge year-to-date, significantly outshining industry counterparts and market benchmarks. The stock's ascent paints a promising picture amidst a competitive landscape.
Charting Growth Trajectories & Valuation MetricsPeering into growth estimates and valuation ratios, Blue Bird stands out with a compelling growth narrative, with earnings poised to soar. The stock's forward-looking sales multiple and Value Score hint at a prudent investment opportunity, perched at an intriguing juxtaposition within the industry.
Deciphering Investment MovesAs Blue Bird's transformation story unfolds into one of growth and promise, investors are poised at a juncture of opportunity. With a steadfast focus on industry trends and the company's strategic roadmap, the decision to jump aboard the Blue Bird bandwagon beckons investors to ponder judiciously.
Blue Bird Corporation Poised for Growth Amid Market DemandCelsius Holdings reported stellar results in its Q4 report, where it posted strong EBITDA of $65 million. That comfortably beat analysts’ estimates of $60 million, driven by improved gross margins and revenue growth. Gross profit was up 110% to $166 million, and gross profit as a percentage of revenue also improved to 47.8%, led by better efficiency in waste management, raw material sourcing, and improved leverage from promotional allowances.
Earnings per share came in at $0.17, or $0.15 on an adjusted basis. Organic sales improved by 95% to $347 million, which topped analysts’ consensus estimates. For the full fiscal year, revenue more than doubled to $1.32 billion.
Should You Invest in Celsius Stock?
Analysts are optimistic about Celsius Holdings, as they have a consensus “Strong Buy” rating with a mean price target of $91.61, reflecting about 3% potential upside. However, B. Riley just raised its price target for the stock to a new Street-high of $110, signifying a potential return of about 23.7% from current levels.
Out of 14 analysts currently tracking the stock, 12 have a “Strong Buy” rating and 2 have a “Hold” rating on CELH.
