Looking At Reports From Celsius, CrowdStrike, and Chipotle

Finally we are nearing the end of the earnings season reports! Probably just a few more updates to cover the rest of our followed stocks. Today we will look at reports from "3 C’s": Celsius, CrowdStrike, and Chipotle.

Celsius (CELH)

Celsius remains one of my great regrets, not jumping into this thing when first reviewed about a year ago. The stock has more than tripled since then (doh!). It continues to just be a rocket ship. Revenue grew another 95% in Q4 and was up 102% for the year, the firm’s amazing 3rd straight year of doubling its revenue. Gross margin gains - a key part of our investment thesis - continue to manifest, coming in at 48% for the year vs. 41.4% a year ago. Celsius is outgrowing the energy drink category by 10x and is now the #1 energy drink on Amazon, ahead of even Monster. Remarkable!

Clearly, I’ve been way low on this one from the outset. Updating the model with the latest guidance, and adjusting some other variables favorably, another big kick up in the fair value is warranted, from $56 up to $81. The stock price remains way ahead of that at present, but we will keep looking for a buying opportunity.

CrowdStrike (CRWD)

CrowdStrike is one we DIDN’T miss, with the shares up 140% since recommendation (our #1 performer to date). I see nothing to dampen the enthusiasm from the Q4 report. Annual recurring revenue (ARR) ended the year at $3.4 billion, up 34% from a year ago. Net new ARR was up 27%. Adoption rates were 64%, 43%, and 27% for 5, 6, and 7 or more modules, a steady increase in the company’s "stickiness" with clients. CrowdStrike continues to win numerous industry awards and is universally recognized as a leader in enterprise-grade cloud and endpoint security.

My updated model leads to a slight increase in fair value, from $228 up to $249. CrowdStrike has blown past that and is a little pricey for my tastes at present. We will hold.

Chipotle (CMG)

Chipotle continues to show why it is one of the best restaurant chains in the world. Annual revenue was up 14.3% (for Q4 it was +15.4%). Comparable store sales grew 8.4% in Q4, on the back of 7.4% higher transaction count (i.e., more traffic). The company opened 271 restaurants for the year, right in line with our 250-300 expectation. 238 had a "Chipotlane", which I’m jealous of (mine does not). The company now has about 3,500 locations, halfway to its ultimate goal of 7,000.

Operationally, Chipotle is hitting on all cylinders, but the stock looks way over-bid to me. I’m upping the fair value to $1,598 (from $1,424), but with the shares trading near $2,800 this one is going to have to remain on the Watch List for now.