What Does Monster Beverage Corporation's (NASDAQ:MNST) Share Price Indicate?

Today we're going to take a look at the well-established Monster Beverage Corporation (NASDAQ:MNST). The company's stock received a lot of attention from a substantial price movement on the NASDAQGS over the last few months, increasing to US$59.94 at one point, and dropping to the lows of US$53.70. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Monster Beverage's current trading price of US$57.63 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Monster Beverage’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Monster Beverage

What's The Opportunity In Monster Beverage?

According to my valuation model, Monster Beverage seems to be fairly priced at around 10.96% above my intrinsic value, which means if you buy Monster Beverage today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth $51.94, there’s only an insignificant downside when the price falls to its real value. Furthermore, Monster Beverage’s low beta implies that the stock is less volatile than the wider market.

What kind of growth will Monster Beverage generate?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to grow by 67% over the next couple of years, the future seems bright for Monster Beverage. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? MNST’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping an eye on MNST, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. At Simply Wall St, we found 1 warning sign for Monster Beverage and we think they deserve your attention.

If you are no longer interested in Monster Beverage, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.