Celsius and Alibaba Present Growth Alternatives to Amazon

Markets are looking for growth alternatives, with Celsius and Alibaba emerging as appealing options. As investor sentiment shifts, these stocks could become key players in offsetting Amazon's looming growth challenges.

Date: 11-01-2025

AI Rating: 6

Market Context
Amazon remains a dominant player in sectors like e-commerce and cloud computing, boasting a market cap of over $2.3 trillion. However, its ability to sustain high growth rates may be waning, prompting investors to explore other promising stocks.

Celsius Analysis
Celsius, currently the third-largest energy drink company, is gaining traction thanks to its focus on natural ingredients and a distribution deal with PepsiCo. Despite a significant stock decline of over 70% from its peak due to distribution challenges, there are signs of recovery. In the first three quarters of 2024, Celsius reported sales of $1 billion, marking a 5% increase compared to the previous year. This growth, while slower than 2023's staggering 104%, is still a positive indicator.

The company's international revenue is also on an upward trend, particularly in Europe and Asia-Pacific where growth reached 38% annually. This could support overall sales growth in the future. Currently, Celsius has a P/E ratio of 41, approaching multi-year lows, which suggests potential for stock price recovery as it resolves distribution issues.

Alibaba Insights
On the other hand, Alibaba, often associated with Amazon due to its Chinese market reach, faces headwinds from geopolitical tensions and a slowing domestic economy. The company has endured nearly $3.8 billion in fines for regulatory breaches and a stock price that has dropped nearly 75% from its all-time high. However, its earnings tell a different story: the net income reached almost $10 billion in the first half of 2024, a 13% rise from the previous year, despite only 5% revenue growth to $68 billion. This indicates that profitability is improving, even if top-line growth is under pressure.

Alibaba's P/E ratio stands at 17, offering a stark contrast to Amazon's higher valuation ratios, suggesting that it may be undervalued. Moreover, Alibaba's forward P/E of 10 signals potential for future growth, which could lead to significant stock price appreciation if market sentiment shifts positively.

Stocks: NASDAQ: CELH NYSE: BABA NASDAQ: AMZN