Alger Mid Cap Growth Fund on Celsius Holdings, Inc.
Thesis
Alger sees Celsius as a leading energy-drink company that has scaled from a niche fitness-oriented brand into one of the largest participants in the U.S. ready-to-drink energy category. Record first-quarter revenue and earnings showed strong headline growth and acquisitions materially expanded the company's scale. The investment case is tempered by gross-margin pressure from lower-margin products, integration issues from recent acquisitions and regulatory scrutiny in one market.
“Celsius Holdings is a leading player in the energy drink market”
Key risks
- Gross-margin compression from a heavier mix of lower-margin products
- Integration risk from recent acquisitions
- Regulatory scrutiny in one of its markets