Where is the energy drink manufacturer Celsius (CELH.US) headed, with a 42% decline this year? Wall Street analysts' opinions are divided.

According to data from the globally renowned research institution Nielsen, while the energy drink market growth has slowed down, energy drink manufacturer Celsius (CELH.US) has still achieved strong growth - the company's second-quarter sales increased by 23% year-on-year, and profits increased by 65% year-on-year. However, this year, Celsius's stock price has fallen by nearly 42%, while its competitor, Monster Beverage Corporation (MNST.US), has only fallen by about 9%. What are the reasons behind the lackluster performance of Celsius's stock? Why are Wall Street analysts becoming more cautious about the stock? Morgan Stanley and Piper Sandler are two companies that have recently rated Celsius. The former lowered its performance expectations for Celsius in the third quarter, while the latter lowered Celsius's target price by 6% to $47. Analysts Eric Serotta of Morgan Stanley and Michael Lavery of Piper Sandler both believe that promotional discounts related to PepsiCo, Inc.'s reduced inventory and the slowing sales in the energy drink market are unfavorable factors for Celsius in the future. Michael Lavery added that under pressure from consumers and the macro environment, the growth of the energy drink category "may continue to be soft for several quarters, and Celsius's market share may continue to stagnate in the face of increasing competition," especially as global energy drink giant Red Bull is currently competing with Celsius with its sugar-free version. In order to gain more market share, Celsius must work harder to attract loyal customers of Monster Beverage Corporation or Red Bull and introduce new consumers to the category to achieve its revenue growth expectations of 30%-34% for 2025 and 2026. However, given the slowdown in sales of the entire energy drink category, this is a very ambitious goal. In addition, acquiring new customers may be more challenging as cash-strapped consumers are less likely to spend money on new products, which is also the view of many on Wall Street. Although sell-side analysts are lowering their target prices for Celsius due to the trend of slowing sales in the energy drink category and increased competition, buy-side analysts are clearly more optimistic about the stock, citing the company's healthy balance sheet (able to withstand market storms), strategic partnerships, positioning in the sugar-free product category, and expanding shelf space/market share in convenience stores and on the Amazon.com, Inc. e-commerce platform. Some analysts point out that the energy drink market is a "red ocean market," but attracting new customers who don't like traditional energy drinks is a "blue ocean market," and Celsius's sugar-free product niche market is a catalyst for its long-term growth. Analysts state, "Celsius has proven itself to be a high-profit growth stock, with increasing profitability indicators showing its competitive advantage." However, analysts also note that new markets cannot be conquered in a few months, but rather take several years. Celsius's performance in the third quarter will show us how the company has been affected by consumer environment and PepsiCo, Inc.'s reduced inventory, and whether the sell-side or the buy-side bet on the stock is correct. Wall Street currently expects Celsius's third-quarter earnings to decline by 43% quarter-on-quarter to $0.16 per share, with sales expected to drop by 24% quarter-on-quarter to $304.9 million. Additionally, it is worth noting that Celsius's short interest ratio is 11.8%, more than twice that of similar companies, indicating that Wall Street is still bearish on the stock.