Why Vita Coco's Valuation is a Sharp Contrast to Celsius in Today's Beverage Market

Vita Coco (NASDAQ: COCO) has emerged as one of the beverage sector’s standout performers this year, climbing 46% through mid-December 2025, yet trading at valuations significantly more affordable than its flashier competitor Celsius (NASDAQ: CELH).

The valuation gap tells an interesting story. Vita Coco’s trailing P/E ratio sits at 47, while Celsius commands an eye-watering 365 P/E multiple. This means you’re getting substantially more earnings power per dollar with Vita Coco — a major distinction in the current market environment.

How Tariff Policy Shifted the Playing Field

The company received an unexpected advantage in November when the White House announced tariff relief on agricultural imports, including coconut water beverages. Vita Coco’s average tariff costs on U.S. imports dropped dramatically from 23% to 6% — a critical win for margin expansion.

Meanwhile, larger beverage giants like PepsiCo and Coca-Cola face a different headwind. The administration’s decision to increase aluminum and steel tariffs from 25% to 50% has hit them harder, as both rely heavily on aluminum can packaging. Vita Coco’s preference for recyclable paper cartons positions it outside this pressure, offering a structural cost advantage competitors don’t enjoy.

Solid Fundamentals Backing the Stock Movement

The financial trajectory validates the market’s enthusiasm. In Q3 2025, net sales jumped 37% year-over-year to $182 million, demonstrating real business momentum beyond just stock price appreciation.

Beyond earnings, the company has secured strategic partnerships — notably becoming the official hydration partner of Rush Soccer, the world’s largest youth soccer organization. These moves extend brand reach while reinforcing the health-conscious positioning that resonated with consumers in 2025.

The Seedlings for Sustainability initiative further strengthens its brand moat, with a commitment to plant 10 million coconut seedlings worldwide by 2030, enabling farming partners to operate up to four times more efficiently. This sustainability focus became a genuine competitive edge in the current market.

The Valuation Asymmetry Worth Noting

With Vita Coco still early in its public company journey since October 2021, the stock has navigated volatility to achieve four consecutive years of gains. The cheaper valuation relative to Celsius suggests the market may be underpricing its combination of growth, profitability, and structural advantages from current policy tailwinds.

The coconut water brand’s diverse product portfolio — spanning traditional coconut water, caffeinated beverages, alcoholic options, and functional drinks — provides multiple growth vectors that larger, single-focus competitors lack.