Activist investing has taken center stage in the beverage sector. Russ Savage, the billionaire founder of energy drink brand Rockstar Energy, has built a significant position in Celsius Holdings (CELH), accumulating over 12 million shares, representing a 4.7% stake. This position was revealed after Celsius posted disappointing Q2 earnings, which triggered an 18.5% intraday sell-off. Savage’s disclosure reversed some losses, sending the stock up 16.8% on August 7. Savage is demanding a complete leadership overhaul, calling for the ouster of CEO John Fieldly, the COO, the brand manager, and the marketing manager.
Activist Pressure Mounts: Rockstar Founder Targets Celsius Management
The management transition follows a period of aggressive portfolio scaling. Under CEO John Fieldly, Celsius has sought to integrate Alani Nu—acquired in 2025—and Rockstar Energy’s U.S. and Canadian distribution assets, purchased from PepsiCo (PEP). Savage, who founded Rockstar in 2001 and sold it to PepsiCo in 2020 for over $4 billion, criticized Celsius for losing shelf space to giants Red Bull and Monster Beverage (MNST). Fieldly defended the strategy, pointing to deliberate cuts of low-velocity Stock Keeping Units (SKUs) and a planned pause in core innovation to clean up distribution networks.
Earnings Breakdown: Revenue Growth Decelerates, Margins Squeeze
Celsius reported Q2 revenue of $817.90 million, up 11% year-over-year, yet below Wall Street consensus of $872 million. While Alani Nu contributed a robust $364.40 million in sales and Rockstar added $66.50 million, the flagship Celsius brand experienced a 12% year-over-year decline. Consequently, gross margins contracted by 340 basis points to 48.1%. Adjusted EPS fell 23% year-over-year to $0.36, missing the $0.42 estimate. Despite these pressures, the company retains a 20% dollar share of the U.S. tracked energy drink market, with a total market capitalization of $7.1 billion.
Valuation & Outlook: Stock Under Pressure
Year-to-date, CELH has dropped 42.23%, and is down 49.13% over the past 52 weeks. It touched a 52-week low of $23.56 on August 6. Valuation remains premium, trading at a forward P/E of 23.41x compared to the industry average of 17.18x. Analysts project Q3 EPS to fall 11.9% year-over-year to $0.37, though full-year EPS is expected to grow 12.7% to $1.51, and reach $1.85 next year.
Wall Street’s Verdict: Divergent Price Targets and Downgrades
Brokerages responded with mixed adjustments. Citi cut its price target from $50 to $40 but kept a ‘Buy’ rating. JPMorgan lowered its target from $56 to $52 (Overweight). Bernstein SocGen Group downgraded the stock to ‘Market Perform’ from ‘Outperform,’ slashing its target from $44 to $26 due to concerns over scale and margin progression. Still, the consensus remains a ‘Strong Buy’ among 22 analysts (17 Buy, 1 Moderate Buy, 4 Hold), with a consensus target of $48.55 (81.2% upside) and a high target of $85.
Frequently Asked Questions (FAQ)
Why is Russ Savage buying CELH stock?
Russ Savage has accumulated over 12 million shares (a 4.7% stake) in Celsius Holdings, believing the current management team is underperforming. He has advocated for executive changes, including replacing the CEO and COO, to prevent Celsius from losing market share to competitors like Red Bull and Monster.
What caused Celsius Holdings’ Q2 earnings miss?
The miss was driven by a 12% decline in sales of the core Celsius brand as the company paused innovation and optimized its product lineup. Additionally, the integration of new distribution networks and product SKU reduction squeezed margins, leading to a gross margin drop to 48.1%.
Is CELH stock still considered a buy by analysts?
Yes, the consensus remains a ‘Strong Buy’ with 17 of 22 analysts maintaining a bullish rating, citing long-term brand momentum and international expansion opportunities despite near-term headwinds.
