After hitting a share price of nearly $100 earlier this year, Celsius (NASDAQ: CELH) is trading at just $30 as of this writing. On Nov. 6, the energy drink company reported a big drop in sales in Q3. Despite the recent sell-off, Celsius stock has been a huge winner in the past five years. The question on many investors’ minds now is whether the stock can regain its lost momentum.

Let’s dig into the company’s most recent results to see what has been going wrong and if the stock can mount a comeback in 2025.

Sales plunge

Celsius saw its Q3 revenue plunge 31% year over year to $265.7 million. North American revenue sank 33% to $247.1 million, while international revenue climbed 37% to $18.6 million.

Sales in the club channel decreased by 4% to $60.5 million, despite a 15% increase in sales at Costco. Overall, club sales were hurt by the timing of promotions at BJs and Sam’s Club. Amazon sales, meanwhile, jumped 21% to $27.0 million.

The overall weakness stemmed largely from the company’s largest distributor as “inventory optimization” efforts resulted in sales to this distributor falling $123.9 million year over year. The distributor is likely PepsiCo, which signed a major deal with Celsius in 2022. The company said it is now seeing a tighter correlation between sell-in and sell-through, but it is not yet fully matched.

Celsius management did not seem to have good visibility into the issue, saying it could have a positive impact on Q4 or a negative impact on sales of up to $15 million.

The company said that unit volumes and retail sales both rose 7% in the quarter. It noted that Celsius was the No. 3 energy drink maker in the U.S. with a 12.1% share, while it contributed the most dollar growth to the category.

The huge sales decline impacted its other operating numbers as well with a break-even result on the bottom line, down from a $0.30 per-share profit a year ago. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), meanwhile, plunged 96% from $103.6 million to $4.4 million. Gross margins fell 440 basis points to 46.0%.

Can the stock rebound in 2025?

The energy drink category as a whole has struggled this year, hurt by a slowdown in traffic at convenience stores, which is one of the main points of distribution for the beverages. Meanwhile, the brand is facing increased competition in the sugar-free segment of the energy drink market from both incumbents as well as new entrants.

Celsius hopes to regain its growth momentum through new product and flavor introductions, as well as more shelf space in stores. On this front, it recently introduced new flavors, such as sparkling watermelon, lemonade, and cherry cola. It also purchased its co-packer, Big Beverages, to give it better control of its supply chain and allow for new innovations. The company said this move will allow it to introduce limited-time offerings, which is something that has greatly helped Keurig Dr Pepper recently in the soda industry.

Meanwhile, international expansion remains perhaps its largest opportunity moving forward. The company saw solid growth from a small base, but right now, it is in only a handful of countries and still in the very early innings of expansion.

Following the decline in its share price, Celsius now trades at a forward price-to-earnings (P/E) ratio just below 30. Whether that valuation is expensive or cheap will really depend on the type of growth the company can muster moving forward now that its U.S. distribution-fueled gains are largely complete.

Data by YCharts.

Celsius still has room to grow, especially in international markets, but it’s hard to know where revenue growth will settle in the near term. While the stock may no longer be overly expensive like it was earlier in the year, it’s not a bargain either.

As such, investors should stay on the sidelines until there is more clarity from management with regard to what more normalized growth for the company might look like. It may be a long, long time before the company climbs back to its previous highs — if ever.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Geoffrey Seiler has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Celsius. The Motley Fool has a disclosure policy.