Shares of Celsius Holdings jumped 5.6% to $29.41 on May 14, snapping a brutal weeklong slide that erased all gains from a blowout first quarter — and then some. The bounce raises a pointed question: has the market mispriced a beverage company that just posted record revenue?

• A Monster Quarter That the Market Ignored

Celsius reported record Q1 revenue of $782.6 million, up 138% year over year, beating analyst estimates of $763.8 million. Adjusted earnings per share hit $0.41, clearing the $0.29 consensus by 40%. Adjusted EBITDA reached $195.5 million, topping Street forecasts by nearly 28%. Yet the stock fell from $34.26 on earnings day to $27.86 by May 13 — a 19% wipeout in five sessions. The disconnect signals that Wall Street isn't rewarding top-line growth; it's laser-focused on profitability quality.

• Acquisitions Are Driving Growth but Squeezing Profits

Most of the revenue growth came from the Alani Nu and Rockstar Energy acquisitions, while the core Celsius brand grew just 6%. Both acquired brands are dilutive to gross margins — consolidated gross margin fell to 48.3%, about 400 basis points lower than a year ago.

Morgan Stanley's Eric Serotta cut his price target from $64 to $55, seeing slowing Alani momentum, while Roth Capital flagged higher aluminum and freight costs likely slowing margin expansion. Put simply: Celsius is bigger, but each dollar of revenue is less profitable than before.

• Wall Street Is Conflicted — and That's Telling

JPMorgan raised its target to $70, Morgan Stanley slashed to $55, and Rothschild set a $57 neutral target. The average new target of $57 still sits well above the current price, but the average target change of -12.5% shows analysts are recalibrating expectations downward.

The P/E ratio of 68.4x remains significantly above its historical median, suggesting the stock may still be overvalued relative to earnings even after the selloff.

• The Real Test Is This Summer

Management guided Q2 gross margin flat to Q1, with margin improvements expected in Q3 and Q4 as procurement synergies and a new North Carolina manufacturing line take hold in the back half of 2026.

The combined portfolio holds roughly 20.9% of U.S. energy drink dollar share. If summer selling season proves Celsius can convert scale into profit, today's bounce could be the floor. If margins stagnate, $29 may prove a waypoint, not a bottom.