Celsius vs. PepsiCo: Which Beverage Stock Packs More Growth Ahead?

Celsius Holdings, Inc. CELH and PepsiCo, Inc. PEP are two influential players in the beverage industry. While PepsiCo stands as a diversified multinational powerhouse with a vast portfolio spanning sodas, snacks and hydration products, Celsius Holdings is a fast-growing disruptor focused on functional, sugar-free energy drinks marketed to health-conscious consumers. Both companies are deeply embedded in the evolving demand for better-for-you beverages.As trends like wellness, convenience, and performance nutrition continue to drive consumer behavior, CELH and PEP each present compelling investment narratives. This article compares their recent performance, innovation efforts, and market positioning to assess which company may be better poised to lead in the next phase of the beverage category's evolution.The Case for Celsius HoldingsCelsius Holdings continues to strengthen its position in the energy beverage market, driven by the core Celsius brand and the acquisition of Alani Nu, finalized on April 1, 2025. Together, Celsius Holdings and Alani Nu accounted for approximately 20% of the total dollar growth in the energy drink category during the first quarter of 2025. With complementary brand identities and strong consumer traction, the combined portfolio enhances Celsius Holdings’ ability to capture a broader customer base and foster long-term brand loyalty.A focus on sugar-free, better-for-you products remains central to the company’s strategy. As consumers increasingly seek healthier, ingredient-conscious beverages, Celsius Holdings is well-positioned to capitalize on this shift. Notably, sugar-free energy drinks contributed 86% of the total growth in the energy category during the first quarter, underscoring the relevance of CELH’s product lineup.Innovation continues to fuel expansion. In the first quarter of 2025, the company introduced new Vibe and ESSENTIALS flavors, alongside the launch of CELSIUS HYDRATION, a product designed to tap into the growing $1.4 billion hydration powder market. These launches are driving deeper household penetration, supporting CELH’s evolution from an occasional purchase to an everyday staple.Retail expansion also remains a key growth lever. The company has recently expanded its distribution through more than 1,800 Home Depot locations and 18,000 Subway restaurants, thereby increasing its presence in both foodservice and on-the-go consumption channels. This enhanced retail footprint sets the stage for continued growth across multiple sales platforms.While Celsius continues to benefit from strong brand momentum and strategic partnerships, it also faces growing operational and financial pressures that could dampen investor sentiment. Rising costs and intensifying competition may make the road ahead bumpier for CELH.The Case for PepsiCoPepsiCo remains a dominant force in the global beverages industry, generating net revenues of $22.7 billion in the second quarter of 2025. It holds significant market share across carbonated soft drinks, hydration, and sports beverages, bolstered by Pepsi Zero Sugar and Gatorade. The company’s presence in away-from-home channels continues to expand, delivering higher margins and driving new consumption occasions in both snacks and beverages.Strategically, PepsiCo is integrating its North American businesses to drive long-term productivity and growth. By investing in AI, ERP systems and unified data platforms, the company is enhancing operational efficiency and enabling faster, more responsive customer service. This streamlined structure reduces costs and expands reach in rural and on-the-go markets, improving service across retail, foodservice and away-from-home consumption channels.PepsiCo is repositioning key brands like Lay’s and Tostitos to elevate real-food credentials. The $2 billion permissible snack segment, PopCorners, SunChips, Simply, and Siete, continues to grow. In beverages, no-sugar colas and functional hydration platforms like Gatorade and Propel are gaining traction, with upcoming innovations aimed at capturing growth in the fast-expanding health and wellness category.PepsiCo is sharpening digital execution through AI, improved A&M efficiency, and data-driven value strategies tailored by channel and pack size. Recent reinvestments support affordability, away-from-home growth, and innovation across snacks and beverages. With strong international momentum and sequential North America improvement, PepsiCo is targeting a return to the low end of its long-term top-line algorithm in the coming quarters.How Does the Zacks Consensus Estimate Compare for CELH & PEP?The Zacks Consensus Estimate for Celsius Holdings’ 2025 earnings per share (EPS) has remained unchanged at 82 cents over the last seven days.Image Source: Zacks Investment ResearchThe EPS estimate for PepsiCo’s 2025 has moved up by 13 cents to $8.00 during this time.Image Source: Zacks Investment ResearchPrice Performance & Valuation of CELH & PEPOver the past month, Celsius Holdings shares have fallen 0.7%, significantly underperforming the S&P 500 Index, which rose 4%. In contrast, PepsiCo’s stock has surged 13.8%, outperforming both Celsius Holdings and the broader market during the same period.Image Source: Zacks Investment ResearchFrom a valuation standpoint, Celsius Holdings currently trades at a forward price-to-earnings (P/E) ratio of 44.59X. Meanwhile, PepsiCo trades at a more modest forward P/E of 17.95X.Image Source: Zacks Investment ResearchBottom LineWhile Celsius Holdings continues to gain traction through innovation and health-driven offerings, its recent stock underperformance and elevated valuation raise caution for near-term investors. PepsiCo, on the other hand, delivers consistent earnings growth and strong momentum across both beverages and snacks. With better price performance, operational efficiency and a clearer growth path, PepsiCo offers a more balanced and resilient investment. For those seeking stability and upside potential, PEP is the smarter pick in today’s market.CELH carries a Zacks Rank #3 (Hold), while PEP currently has a Zacks Rank #2 (Buy).  You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.5% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report PepsiCo, Inc. (PEP): Free Stock Analysis Report Celsius Holdings Inc. (CELH): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks