Critical Comparison: Celsius (NASDAQ:CELH) and Luckin Coffee (OTCMKTS:LKNCY)

Luckin Coffee (OTCMKTS:LKNCY) and Celsius (NASDAQ:CELH) are both mid-cap consumer staples companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, institutional ownership, valuation, analyst recommendations, dividends, earnings and risk.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Luckin Coffee and Celsius, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Luckin Coffee	0	1	1	2	3.25
Celsius	1	6	14	0	2.62

Luckin Coffee currently has a consensus price target of $46.87, indicating a potential upside of 43.19%. Celsius has a consensus price target of $41.76, indicating a potential upside of 47.62%. Given Celsius’ higher probable upside, analysts clearly believe Celsius is more favorable than Luckin Coffee.

Profitability

This table compares Luckin Coffee and Celsius’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Luckin Coffee	6.78%	24.91%	12.44%
Celsius	4.24%	36.52%	8.53%

Risk and Volatility

Luckin Coffee has a beta of -0.34, suggesting that its stock price is 134% less volatile than the S&P 500. Comparatively, Celsius has a beta of 1.01, suggesting that its stock price is 1% more volatile than the S&P 500.

Earnings & Valuation

This table compares Luckin Coffee and Celsius”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Luckin Coffee	$7.03 billion	1.33	$513.88 million	$1.68	19.48
Celsius	$2.52 billion	2.85	$108.00 million	$0.24	117.88

Luckin Coffee has higher revenue and earnings than Celsius. Luckin Coffee is trading at a lower price-to-earnings ratio than Celsius, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

0.5% of Luckin Coffee shares are held by institutional investors. Comparatively, 61.0% of Celsius shares are held by institutional investors. 2.7% of Luckin Coffee shares are held by insiders. Comparatively, 2.3% of Celsius shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

Luckin Coffee beats Celsius on 8 of the 15 factors compared between the two stocks.

About Luckin Coffee

Luckin Coffee Inc. offers retail services of freshly brewed drinks, and pre-made food and beverage items in the People's Republic of China. It offers hot and iced freshly brewed coffee, such as Americano, Latte, Cappuccino, Macchiato, Flat White, and Mocha, as well as specialty coffee based on market and seasonal trends; coconut milk latte products; tea drinks; pre-made beverages; and pre-made food items, such as pastries, sandwiches, and snacks. In addition, the company offers Luckin Pop premium instant coffee and inspirational cups through mobile apps and e-commerce platforms. It operates pick-up stores, relax stores, and delivery kitchens under the Luckin brand, as well as Luckin mobile app, Weixin mini-program, and other third-party platforms for third-party payment channels. Further, the company offers technical and consultation services; and manufactures materials for products. Luckin Coffee Inc. was incorporated in 2017 and is headquartered in Xiamen, the People's Republic of China.

About Celsius

Celsius Holdings, Inc. develops, processes, markets, distributes, and sells functional energy drinks and liquid supplements in the United States, Australia, New Zealand, Canadian, European, Middle Eastern, Asia-Pacific, and internationally. The company offers CELSIUS, a fitness drink or supplement designed to accelerate metabolism and burn body fat; various flavors and carbonated and non-carbonated functional energy drinks under the CELSIUS Originals and Vibe name, as well as functional energy drink under the CELSIUS Essentials and CELSIUS On-the-Go Powder names; and CELSIUS ready-to drink products. It distributes its products through direct-to-store delivery, distributors, supermarkets, convenience stores, drug stores, nutritional stores, and mass merchants, as well as health clubs, gyms, the military, and e-commerce websites. The company was formerly known as Vector Ventures, Inc. and changed its name to Celsius Holdings, Inc. in January 2007. Celsius Holdings, Inc. was founded in 2004 and is headquartered in Boca Raton, Florida.