Core Celsius Brand Drags Again as Alani Nu Carries Growth

What happened

Celsius reported quarterly results with flagship Celsius brand revenue declining 6% year-over-year while Alani Nu continued to grow, confirming that growth is now heavily dependent on newer brands. Rising costs, likely from promotional activity and integration, kept profit from following sales, consistent with the gross margin compression seen in prior quarters. The stock reacted negatively, as investors grappled with the core brand's persistent slump despite completed shelf resets and distribution gains. This outcome aligns with the DeepValue master report's WAIT rating, which flagged that Celsius-brand revenue fell 11.7% in Q2 2026 and needed a recovery to validate the thesis. The report's bull case hinged on SKU rationalization and resets improving mix, but this earnings release indicates the flagship is still losing ground while Alani Nu masks the weakness.

Implication

This earnings report suggests the bear case is playing out, with core brand revenue still negative and margins under pressure. Until the flagship Celsius brand returns to positive growth and gross margin recovers above 49%, the stock's high multiples (P/E over 130, EV/EBITDA near 35) leave little room for error. Alani Nu's strength is positive but masks the underlying issue: the company's original growth engine is sputtering, and management's fixes have not yet translated into better financials. The next quarterly filing will be critical; if core revenue remains negative and margins fail to improve, the stock could re-rate further toward the bear case implied value of $22. We maintain a WAIT rating and would only consider a position at or below the attractive entry of $24 if accompanied by concrete signs of core brand stabilization.

Thesis delta

The master report's WAIT rating was predicated on the next quarter proving core brand recovery; this earnings report fails that test, as flagship revenue slid 6%. The thesis shifts from 'wait for confirmation' to 'wait for evidence of stabilization before even considering entry,' and the probability of the bear scenario increases from 30% to perhaps 35-40%. The investment case becomes less attractive in the near term, with a higher likelihood of further multiple compression.