2 Beaten-Down Consumer Stocks That Could Double in Five Years
Key Points
Chewy benefits from high customer loyalty and rising margins, making the stock's 16x forward earnings multiple look too cheap.
Celsius continues to see strong consumer demand at retail -- even while the stock trades well off its highs.
- 10 stocks we like better than Chewy ›
Buying growth stocks after a sell-off can be a smart path to a double, provided the business keeps its edge. Chewy (NYSE: CHWY) and Celsius (NASDAQ: CELH) fit that setup today.
Both of these consumer stocks trade well below their highs, carry reasonable forward earnings multiples, and still have clear growth runways. Here's why they look like potential double-baggers over the next five years.
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1. Chewy
Pet spending remains a large, resilient market. The industry reached $158 billion in 2025 and is expected to climb to $165 billion in 2026, according to the American Pet Association. Yet Chewy is trading 46% below its 52-week high, and the stock trades at a modest 16x forward price-to-earnings (P/E) multiple.
Chewy is still growing and taking share. In the first quarter, revenue rose 7.7% year over year to $3.36 billion. This is faster than the 4.4% increase expected in pet spending this year.
One of the most attractive qualities of Chewy's business is customer loyalty. Once customers start shopping at Chewy, they tend to stay. This is most evident in its Autoship sales, which grew more than 10% year over year last quarter and represented 84% of total sales.
Customer trends are also moving in the right direction. Chewy added nearly 170,000 net new customers in the quarter, reaching 21.5 million active customers, while average net sales per active customer increased to $597.
Profitability is improving, too. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margin hit a record 7.5%, up more than a point from a year ago. Chewy has multiple ways to keep expanding margins, including sponsored ads, warehouse automation, and a bigger mix of higher-margin health offerings. However, some of these benefits will take time to show up as the company continues investing in vet care in the near term.
Share gains and rising margins suggest Chewy's moat is widening, making 16x forward earnings look inexpensive. If the market eventually values it closer to the broader market multiple -- and earnings continue to grow -- the stock could reasonably double over five years.
2. Celsius
Energy drinks have been one of the fastest-growing categories in beverages, and Celsius has become a major player. Even with its brands representing roughly 20% of U.S. energy drink sales, the stock sits 46% below its 52-week high.
A key advantage is distribution. Celsius' partnership with PepsiCo has helped it win shelf space and expand the core Celsius brand. At the same time, the company is building a more diversified portfolio with names like Alani Nu and Rockstar Energy.
In the second quarter, Celsius reported $818 million in revenue, up 11% year over year. But retail sales were up 31% across tracked U.S. channels, which better captures consumer demand. The gap largely comes down to the timing of shipments to bottlers and other customers, which can make reported revenue growth look choppier than what's happening at the shelf.
Portfolio adjustments are also pressuring near-term results. Management is reshaping Celsius's product mix and cutting weaker-performing units amid softer consumer spending. That can weigh on growth and margins now, but it doesn't necessarily change what the business can earn when conditions normalize and the mix improves.
International growth remains a major opportunity. Overseas sales rose 10% year over year last quarter but still represent a small portion of total revenue. Management's longer-term goal is for international revenue to reach 15% of total revenue over the next five years.
Celsius is also seeing productivity gains in distribution that could support better margins over time. If it can sustain double-digit revenue growth and expand earnings faster than sales, a five-year double is plausible. At 24x forward P/E, the stock looks reasonably priced for a top-tier brand in a growing category.
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John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chewy. The Motley Fool recommends Celsius Holdings. The Motley Fool has a disclosure policy.
