Pershing Square Challenge 2026 Third Place: Celsius $CELH

Why It Matters

Celsius appears undervalued relative to faster‑growing peers, offering a compelling upside if its Alani acquisition and brand strength translate into sustained growth, though competitive threats could temper that upside.

Key Takeaways

• Celsius trades at ~20x forward, below Monster and Coke multiples.
• Alani acquisition drives 60% quarterly revenue growth, boosting outlook.
• Survey of 500+ consumers shows strong brand recall and switch willingness.
• Competition from private‑label and new entrants poses terminal‑value risk.
• Impulse‑purchase model limits bulk‑sale threats from Costco/Kirkland in market.

Summary

The Pershing Square Challenge team earned third place by pitching Celsius Holdings (CELH), highlighting its growth trajectory, recent Alani acquisition, and valuation gaps. The presenters emphasized that Celsius is trading at roughly a 20‑times forward earnings multiple, well below peers such as Monster (34x) and Coca‑Cola (24‑25x), despite posting about 10% annual revenue growth.

Key data points include a 60% year‑over‑year revenue surge in the quarter following the Alani acquisition, which the market has not fully priced in. A proprietary survey of more than 500 energy‑drink consumers revealed strong brand recall, high willingness to switch, and a preference for impulse purchases, underscoring durable demand. The team also noted that the brand skews heavily toward female millennials and benefits from Amazon bulk‑ordering patterns.

Notable examples from the discussion featured the team’s rebuttal to the Kirkland/Costco private‑label threat, arguing that energy drinks are primarily impulse buys and that private‑label success typically hinges on price‑sensitive staples. They also cited competitive pressures from new entrants like Bloom and celebrity‑backed lines, but argued that Celsius’s brand equity mitigates long‑term terminal‑value concerns.

The analysis suggests a potential upside for investors if the market re‑evaluates Celsius’s growth prospects, especially the Alani integration, while remaining mindful of competitive dynamics and the need for continued brand differentiation. Monitoring consumer sentiment and execution of the acquisition will be critical to realizing the implied valuation discount.

Original Description

Celsius trades at ~20x earnings while growing ~18% a year, cheaper than Monster (~34x) and even Coke (~25x) despite faster growth. The Pershing Square Challenge third-place team makes the long case for $CELH: the market is sleeping on the Alani Nu acquisition, and their 500-person proprietary survey says the brand loyalty is real. Andrew pushes back hard on the Costco/Kirkland private-label threat, the heavy reliance on Pepsi distribution, and whether energy drinks are just the next "protein" fad waiting to be disrupted.

CELH pitch deck: https://www.dropbox.com/scl/fo/rsyotzf7g2efkj9rfmg23/AHHk4_h_6CU12R-dTrAOtH4?rlkey=664lkpggv77rwkzh3rh78826q&e=2&st=0s4tiwjy&dl=0

This episode is sponsored by Trata. Trata is buy-siders interviewing each other; it is the fastest way I know to ramp up on a name. See a sample here: https://www.trata.com/celh

Chapters:

0:00 Why energy drinks (and Celsius) are a passion

1:13 Sponsor: Trata

2:46 Meet team Celsius, third place at the Pershing Square Challenge

4:23 Why they picked Celsius for the pitch

7:19 The setup: ~20x earnings, ~18% growth, an underpriced Alani

8:47 Why the market is discounting Celsius

10:09 The Costco/Kirkland private-label crash, and the rebuttal

12:26 Andrew's pushback: don't loyal buyers just order in bulk?

16:14 The proprietary 500-person survey

18:48 Distribution vs. brand: is the survey actually a bear case?

22:31 The Pepsi relationship: Rockstar, the 11% stake, and the risk

26:08 The Alani acquisition: sugar high or smart capital allocation?

31:24 Are energy drinks the next protein? The fad debate

38:40 Valuation: the Coke and Monster arbitrage

43:38 Wrap-up

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Production and editing by The Podcast Consultant - https://thepodcastconsultant.com/