Why Nasdaq Stocks Electronic Arts and Celsius Holdings Stood Out Wednesday

Much of the stock market got some good news on Wednesday morning, with the latest reading on consumer prices helping to rein in some of the concerns about macroeconomic pressures affecting long-term stock returns. However, the Nasdaq Composite (^IXIC -1.25%) didn’t immediately benefit from that trend, and as of 11 a.m. ET, it was down half a percent even as other major market benchmarks were up on the day.

But that’s not to say that the entire Nasdaq missed out on the broader market move higher. Shares of Electronic Arts (EA 10.84%) and Celsius Holdings (CELH 20.82%) were Nasdaq winners on Wednesday, riding positive sentiment from shareholders following their latest financial results.

Person wearing a video game headset and sitting at a computer.

Image source: Getty Images.

EA is back in the game

Shares of Electronic Arts were up more than 11% on Wednesday morning. The move came after the video game giant announced its financial results for the fiscal fourth quarter, ending March 31, and asserted that it would be able to survive losing a key relationship that has helped its portfolio for decades.

EA’s results showed considerable growth. Net revenue in the fiscal fourth quarter jumped 36% to $1.83 billion, with an 18% year-over-year rise in net bookings to $1.75 billion. Net income nearly tripled to $225 million, producing earnings of $0.80 per share. The per-share figures also benefited from ongoing stock buybacks that helped to reduce overall share counts.

One interesting element involves EA’s changing relationship with FIFA, the organization that oversees international soccer. Electronic Arts will no longer use the FIFA name on its soccer video game. But it expects to leave the rest of the game largely untouched, as relationships with national leagues and teams will still give EA access to the rights it needs to offer realistic game play.

Despite expectations that EA’s growth will slow, investors were comfortable with the video game company’s guidance. Electronic Arts sees full-year fiscal 2023 sales of $7.6 billion to $7.8 billion, producing net income of $793 million to $815 million. That should produce earnings of $2.79 to $2.87 per share.

That’s not a super-cheap valuation at the video game stock‘s current price, but it does show that EA has some resiliency in its business model that some investors didn’t realize was there.

Celsius bulks up

Meanwhile, shares of Celsius Holdings were up nearly 23%. The purveyor of its namesake fitness drink reported first-quarter financial results that set new records and showed continued lightning-fast growth.

Revenue at Celsius jumped 167% during the first quarter to $133 million, with North American sales more than tripling from year-ago levels. The company attributed the sales gains to expansion in both clubs and traditional vending distribution channels, and direct store delivery also saw substantial boosts that were able to overcome weakness in the Nordic region of Europe. Net income soared to $6.7 million.

Celsius is working hard to capture market share. In recent weeks, the company has cracked the top two, surpassing Red Bull in sales via some distribution channels and trailing only Monster Beverage (MNST 2.22%). At the same time, Celsius is making its products available at more and more convenience stores, boosting its network by more than 30,000 stores in just the past 12 months.

In a market in which investors have been burned by high-growth tech stocks, Celsius offers decidedly non-tech exposure to the stock market. If it can keep growing, though, then Celsius could match the impressive long-term performance that Monster has achieved over its long history.

Leave a Reply

Your email address will not be published.

Back to top button