1 Rising Stock That Destroyed the "Magnificent Seven" in 5 Years

The "Magnificent Seven" stocks have been great investments during the past five years. Yet Nvidia stands out. The AI chip maker's stock has risen 1,940%. One under-the-radar beverage stock has done better. Celsius is an emerging energy drink producer (NASDAQ: CELH). Its shares have risen 6,000% in five years, turning a $1,000 investment into $61,000.

Celsius' performance was driven by growth, which shouldn't surprise investors. Also true of the Magnificent Seven. Celsius had another strong year financially. Revenue was $1.3 billion, rising 102% year over year and 25 times 2018 levels. "We continued to drive category growth by bringing in new loyal consumers and increasing consumption occasions," stated CEO John Fieldly.

These advances are even more impressive given the downturn. Most people agree that increasing interest rates and inflationary pressures make the macro environment less friendly than it was a few years ago. Celsius' energy drinks are in high demand.

Management has done well promoting and distributing the brand. Celsius sells more energy drinks on Amazon than Monster and Red Bull. This is impressive given the big e-commerce site receives billions of visitors monthly. This bodes well for Celsius. PepsiCo acquired Celsius' shares and became its U.S. and international distributor in August 2022. Monster also teamed with Coca-Cola in 2014 to expand distribution.

This quick rise has helped Celsius's profitability. After a $158 million loss in 2022, the corporation earned $266 million last year. Selling, general, and administrative expenses fell 14%, boosting profits. Rising earnings please shareholders.

The stock's quick rise makes it expensive. Celsius has a 72.6 ahead P/E. It costs more than any Magnificent Seven stock. I think this valuation assumes Celsius can grow to the moon. This overwhelming excitement makes me hesitant to buy shares.

Even Wall Street predicts a downturn. Analysts expect revenue to rise 37% this year. Forecasts should be taken with a grain of salt, but this would be a significant Celsius decrease, which is reasonable.

However, the valuation assumes endless monster growth. Like certain Magnificent Seven components, the stock may be priced for perfection today. Celsius's growth is stunning. Investors should follow the company, track development and profitability, and wait for a better entry moment.

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