Celsius Cools Off After Hot Q3 Beat

This article first appeared on GuruFocus.

Celsius (NASDAQ:CELH)shares took a hard hit Thursday, tumbling more than 21%, even after the energy drink maker crushed expectations for the third quarter.

The sell-off had little to do with performance and everything to do with timing. Celsius said that starting in December, it's shifting its Alani Nu brand into PepsiCo's (NASDAQ:PEP) distribution network. That handoff will cause a short-term sales wobble as old distributors wind down inventory and Pepsi builds up new stock. Essentially, sales might look bumpy for a bit even though demand isn't the issue.

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Underneath that temporary disruption, business is booming. Q3 revenue surged 173% year-over-year to $725 million, and earnings came in at $0.42 per share, both ahead of forecasts. Overseas, sales climbed 24%, with strong traction in Europe and Australia.

Even with this pullback, Celsius stock is still up nearly 80% this year, crushing the S&P 500's 15% gain a sign that the company's momentum is still very much alive.

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