Celsius Holdings, a prominent player in the energy drink market, has caught the attention of Wall Street analysts who predict significant upside potential for the stock. Despite facing a weak consumer spending environment that has affected retail traffic and sales growth, analysts see an average price target of $37.91 for Celsius, implying a 72% increase from current levels. Celsius has positioned itself well in the market, aligning its brand with the trend towards zero-sugar and “better-for-you” ingredients.
Over a quarter of energy drink consumers aged 18 to 34 consider healthy ingredients important when making purchase decisions. The energy and sports drink market is expected to grow from $112 billion this year to $136 billion by 2029, according to Statista. Celsius has outpaced the industry in recent years, increasing its annual revenue from less than $100 million to over $1.3 billion in the past five years.
Analysts expect the company to report a 3% revenue increase in 2024, improving to 15% in 2025. Sweetgreen, a fast-casual restaurant chain focusing on healthy bowls and salads, is another company that has caught the eye of Wall Street. The company had 235 locations as of the end of the 2024 third quarter and is expanding at a steady pace.
Revenue increased 13% year-over-year in the third quarter, driven by new stores and same-store sales growth of 6%. Although Sweetgreen is not yet profitable, it is getting closer.
Strong growth boosts investor confidence
Operating losses improved from $26.5 million last year to $21.5 million this year, and restaurant-level profit margins increased from 19% to 20%. Investors are optimistic about the company’s future potential, with the stock rising 112% over the past year. Wall Street’s average price target for Sweetgreen is $43.50, indicating a 72% upside.
Shopify, a leading e-commerce platform, has made a strong comeback after being one of the biggest losers in the 2022 bear market. The company divested its Deliverr fulfillment business and formed a collaboration with Amazon’s Buy with Prime, leading to impressive growth. In the fourth quarter, gross merchandise value on its platform rose 26% to $94.4 billion, lifting revenue up 31% to $2.81 billion, above the consensus estimate of $2.73 billion.
Shopify is now profitable on a GAAP basis, with operating income improving from $289 million to $465 million. The company expects its strong growth to continue into 2025, with mid-20s percentage growth in revenue and low-20s growth in gross profit. Wall Street analysts have recently raised the price target on Shopify stock from $143 to $175, indicating a 44% upside.
These three stocks – Celsius Holdings, Sweetgreen, and Shopify – have shown significant potential for growth and could offer substantial returns in the coming years. Investors seeking long-term growth opportunities may want to consider these options as part of their portfolio.
