| Snowflake Score | |
|---|---|
| Valuation | 2/6 |
| Future Growth | 4/6 |
| Past Performance | 2/6 |
| Financial Health | 6/6 |
| Dividends | 0/6 |
MNST Stock Overview
Monster Beverage Corporation, through its subsidiaries, engages in development, marketing, sale, and distribution of energy drink beverages and concentrates in the United States and internationally.
Monster Beverage Competitors
Price History & Performance
| Historical stock prices | |
|---|---|
| Current Share Price | US$91.51 |
| 52 Week High | US$99.81 |
| 52 Week Low | US$71.78 |
| Beta | 0.92 |
| 1 Month Change | -3.69% |
| 3 Month Change | 5.48% |
| 1 Year Change | -4.54% |
| 3 Year Change | 57.69% |
| 5 Year Change | 65.90% |
| Change since IPO | 219,527.51% |
Recent News & Updates
Monster Beverage: Simply Too Expensive
Monster Beverage is a consumer company that develops, manufactures, and markets energy drinks. Growing revenues significantly above 10% CAGR for the past 5 years, many investors regarded Monster Beverage as an international growth story. Monster Beverage is no doubt a quality business. However, the price is simply too high to justify a reasonable return expectation for investors. As a function of valuation, I initiate with a Sell recommendation. My target price is $59.80/share. Thesis I am bearish on Monster Beverage (MNST) as I see the company's stock as overvalued. In my opinion, trading at a P/E of close to x40, the current market environment provides much better opportunities for investors to allocate capital. Notably, Monster Beverage stock did not lose much value YTD and thus outperformed the S&P 500 by about 20 percentage points. I like to view the current share price strength as a selling-opportunity and rotate capital into bargain opportunities, such as Victoria's Secret (VSCO), Meta Platforms (META), or Volkswagen (VWAGY). I value MNST stock with a residual earnings framework, anchored on analyst consensus EPS estimates, and calculate a fair implied share-price of $59.88. About Monster Beverage Monster Beverage is a consumer company that develops, manufactures and markets energy drinks. The company operates three major segments: Monster Energy Drinks, Strategic Brands and Alcoholic Beverages. Notably, Monster Energy Drinks is about 95% of total sales and Strategic Brands accounts for the rest. Alcoholic Beverages, as of 2021 does not account for any noteworthy share of sales for the group. Geographically, more than 60% of sales are generated in the North America Region and slightly less than 20% in EMEA. Asia Pacific and Latin America make up the rest. Growing revenues significantly above 10% CAGR for the past 5 years, many investors regarded Monster Beverages as an international growth story. The company has quickly grown to claim more than 40% of the global energy drink market, only slightly behind Austrian-based Red Bull. Accordingly, MNST share price jumped from about $6/share in early 2021 to more than $90/share as of 2022. This represents a 1,400% total return and 25% annualized. Seeking Alpha Given these numbers, the company's stock has been awarded with a rich growth multiple. Accordingly, the company's current > x39 P/E implies that Monster beverages expansion is expected to continue. Seeking Alpha Valuation Ahead Of Fundamentals However, I would like to point out that Monster Beverage is trading at an expensive price. Especially considering rising real yields and falling asset prices across markets make MNST elevated P/E vulnerable to multiple contraction. Moreover, Monster Beverages' margins are not immune to rising commodity costs and wage inflation. That said, I see a scenario of 30% multiple contraction in combination with a 15% EPS reduction not as unlikely, which could imply about 40% share-price downside. But even if there is no EPS and multiple contraction it is easy to show that the market is considerably ahead of analyst consensus. For reference, according to the Bloomberg Terminal as of July 15th, Monster Beverage's revenues in 2022, 2023 and 2024 are expected at $6.42 billion, $7.08 billion and $7.81 billion. This is a CAGR growth materially below the company's historical performance. Respectively EPS are estimated at $2.34, $3.08 and $3.53. From 2018 to 2021, Monster Beverages increased revenues from $3.8 billion to $5.5 billion, reflecting a 3-year CAGR of about 13%. Over the same period, EBITDA jumped from about $1.35 billion to approximately $1.85 billion (11% CAGR). Monster Beverages is as good as debt-free with only $34 million of financial liabilities and more than $2.7 billion of cash and short term investments. In 2021, cash provided from operations was about $1.2 billion. Residual Earnings Valuation Let us now look at the valuation. What could be a fair per-share value for the company's stock? To answer the question, I have constructed a Residual Earnings framework and anchor on the following assumptions: To forecast EPS, I anchor on consensus analyst forecast as available on the Bloomberg Terminal 'till 2025. In my opinion, any estimate beyond 2025 is too speculative to include in a valuation framework. But for 2-3 years, analyst consensus is usually quite precise
Is Monster Beverage Corporation (NASDAQ:MNST) Trading At A 48% Discount?
Today we'll do a simple run through of a valuation method used to estimate the attractiveness of Monster Beverage...
Shareholder Returns
| MNST | US Beverage | US Market | |
|---|---|---|---|
| 7D | 1.9% | 2.1% | 1.1% |
| 1Y | -4.5% | 13.3% | -9.0% |
Return vs Industry: MNST underperformed the US Beverage industry which returned 12.2% over the past year.
Return vs Market: MNST exceeded the US Market which returned -8.9% over the past year.
Price Volatility
| MNST volatility | |
|---|---|
| MNST Average Weekly Movement | 3.7% |
| Beverage Industry Average Movement | 6.5% |
| Market Average Movement | 7.6% |
| 10% most volatile stocks in US Market | 17.0% |
| 10% least volatile stocks in US Market | 3.1% |
Stable Share Price: MNST is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.
Volatility Over Time: MNST's weekly volatility (4%) has been stable over the past year.
About the Company
| Founded | Employees | CEO | Website |
|---|---|---|---|
| 1985 | 3,775 | Rodney Sacks | https://www.monsterbevcorp.com |
Monster Beverage Corporation, through its subsidiaries, engages in development, marketing, sale, and distribution of energy drink beverages and concentrates in the United States and internationally. The company operates through three segments: Monster Energy Drinks, Strategic Brands, and Other. It offers carbonated energy drinks, non-carbonated, ready-to-drink iced teas, lemonades, juice cocktails, single-serve juices and fruit beverages, ready-to-drink dairy and coffee drinks, energy drinks, sports drinks and single-serve still waters, and sodas that are considered natural, sparkling juices, and flavored sparkling beverages.
Monster Beverage Fundamentals Summary
| MNST fundamental statistics | |
|---|---|
| Market Cap | US$48.22b |
| Earnings (TTM) | US$1.23b |
| Revenue (TTM) | US$6.01b |
39.3x
P/E Ratio8.0x
P/S RatioIs MNST overvalued?
See Fair Value and valuation analysisEarnings & Revenue
| MNST income statement (TTM) | |
|---|---|
| Revenue | US$6.01b |
| Cost of Revenue | US$2.90b |
| Gross Profit | US$3.11b |
| Other Expenses | US$1.89b |
| Earnings | US$1.23b |
Last Reported Earnings
Jun 30, 2022
Next Earnings Date
n/a
| Earnings per share (EPS) | 2.33 |
| Gross Margin | 51.81% |
| Net Profit Margin | 20.40% |
| Debt/Equity Ratio | 0% |
How did MNST perform over the long term?
See historical performance and comparisonValuation
Is MNST undervalued compared to its fair value, analyst forecasts and its price relative to the market?
Valuation Score
2/6Valuation Score 2/6
Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast
Key Valuation Metric
Which metric is best to use when looking at relative valuation for MNST?
Other financial metrics that can be useful for relative valuation.
| What is MNST's n/a Ratio? | |
|---|---|
| n/a Ratio | 0x |
| n/a | n/a |
| Market Cap | US$48.22b |
| Key Statistics | |
|---|---|
| Enterprise Value/Revenue | 7.6x |
| Enterprise Value/EBITDA | 27.1x |
| PEG Ratio | 2x |
Price to Earnings Ratio vs Peers
How does MNST's PE Ratio compare to its peers?
| MNST PE Ratio vs Peers |
|---|
| Company | PE | Estimated Growth | Market Cap |
|---|---|---|---|
| Peer Average | 24.5x | ||
KDP Keurig Dr Pepper | 26.1x | 8.2% | US$56.7b |
KOF Coca-Cola FEMSA. de | 15.8x | 12.8% | US$13.2b |
PEP PepsiCo | 26.9x | 3.4% | US$248.7b |
KO Coca-Cola | 29.3x | 5.5% | US$280.6b |
MNST Monster Beverage | 39.3x | 19.2% | US$48.2b |
Price-To-Earnings vs Peers: MNST is expensive based on its Price-To-Earnings Ratio (39.3x) compared to the peer average (24.5x).
Price to Earnings Ratio vs Industry
How does MNST's PE Ratio compare vs other companies in the Global Beverage Industry?
Price-To-Earnings vs Industry: MNST is expensive based on its Price-To-Earnings Ratio (39.3x) compared to the US Beverage industry average (34.5x)
Price to Earnings Ratio vs Fair Ratio
What is MNST's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.
| Fair Ratio | |
|---|---|
| Current PE Ratio | 39.3x |
| Fair PE Ratio | 32.3x |
Price-To-Earnings vs Fair Ratio: MNST is expensive based on its Price-To-Earnings Ratio (39.3x) compared to the estimated Fair Price-To-Earnings Ratio (32.3x).
Share Price vs Fair Value
What is the Fair Price of MNST when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.
Below Fair Value: MNST ($91.51) is trading below our estimate of fair value ($173.13)
Significantly Below Fair Value: MNST is trading below fair value by more than 20%.
Analyst Price Targets
What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?
Analyst Forecast: Target price is less than 20% higher than the current share price.
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Future Growth
How is Monster Beverage forecast to perform in the next 1 to 3 years based on estimates from 18 analysts?
Future Growth Score
4/6Future Growth Score 4/6
Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE
19.2%
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: MNST's forecast earnings growth (19.2% per year) is above the savings rate (1.9%).
Earnings vs Market: MNST's earnings (19.2% per year) are forecast to grow faster than the US market (14.5% per year).
High Growth Earnings: MNST's earnings are forecast to grow, but not significantly.
Revenue vs Market: MNST's revenue (9.9% per year) is forecast to grow faster than the US market (7.9% per year).
High Growth Revenue: MNST's revenue (9.9% per year) is forecast to grow slower than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: MNST's Return on Equity is forecast to be high in 3 years time (23.3%)
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Past Performance
How has Monster Beverage performed over the past 5 years?
Past Performance Score
2/6Past Performance Score 2/6
Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE
12.6%
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: MNST has high quality earnings.
Growing Profit Margin: MNST's current net profit margins (20.4%) are lower than last year (29.9%).
Past Earnings Growth Analysis
Earnings Trend: MNST's earnings have grown by 12.6% per year over the past 5 years.
Accelerating Growth: MNST's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.
Earnings vs Industry: MNST had negative earnings growth (-20.3%) over the past year, making it difficult to compare to the Beverage industry average (12.6%).
Return on Equity
High ROE: MNST's Return on Equity (18%) is considered low.
Discover strong past performing companies
Financial Health
How is Monster Beverage's financial position?
Financial Health Score
6/6Financial Health Score 6/6
Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage
Financial Position Analysis
Short Term Liabilities: MNST's short term assets ($4.7B) exceed its short term liabilities ($1.1B).
Long Term Liabilities: MNST's short term assets ($4.7B) exceed its long term liabilities ($272.2M).
Debt to Equity History and Analysis
Debt Level: MNST is debt free.
Reducing Debt: MNST had no debt 5 years ago.
Debt Coverage: MNST has no debt, therefore it does not need to be covered by operating cash flow.
Interest Coverage: MNST has no debt, therefore coverage of interest payments is not a concern.
Balance Sheet
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Dividend
What is Monster Beverage current dividend yield, its reliability and sustainability?
Dividend Score
0/6Dividend Score 0/6
Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage
Dividend Yield vs Market
Notable Dividend: Unable to evaluate MNST's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.
High Dividend: Unable to evaluate MNST's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.
Stability and Growth of Payments
Stable Dividend: Insufficient data to determine if MNST's dividends per share have been stable in the past.
Growing Dividend: Insufficient data to determine if MNST's dividend payments have been increasing.
Earnings Payout to Shareholders
Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.
Cash Payout to Shareholders
Cash Flow Coverage: Unable to calculate sustainability of dividends as MNST has not reported any payouts.
Discover strong dividend paying companies
Management
How experienced are the management team and are they aligned to shareholders interests?
1.6yrs
Average management tenure
CEO
Rodney Sacks (72 yo)
1.58yrs
Tenure
US$16,707,577
Compensation
Mr. Rodney Cyril Sacks, H.Dip.Law, H.Dip.Tax has been the Chairman at Monster Beverage Corporation (formerly, Hansen Natural Corporation) since November 1990 and also serves as its Co-Chief Executive Offic...
CEO Compensation Analysis
Compensation vs Market: Rodney's total compensation ($USD16.71M) is about average for companies of similar size in the US market ($USD12.87M).
Compensation vs Earnings: Rodney's compensation has been consistent with company performance over the past year.
Leadership Team
Experienced Management: MNST's management team is not considered experienced ( 1.6 years average tenure), which suggests a new team.
Board Members
Experienced Board: MNST's board of directors are considered experienced (7.2 years average tenure).
Ownership
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.
Recent Insider Transactions
Ownership Breakdown
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
Top Shareholders
Company Information
Monster Beverage Corporation's employee growth, exchange listings and data sources
Key Information
- Name: Monster Beverage Corporation
- Ticker: MNST
- Exchange: NasdaqGS
- Founded: 1985
- Industry: Soft Drinks
- Sector: Food, Beverage & Tobacco
- Implied Market Cap: US$48.215b
- Shares outstanding: 526.89m
- Website: https://www.monsterbevcorp.com
Number of Employees
Location
- Monster Beverage Corporation
- 1 Monster Way
- Corona
- California
- 92879
- United States
Listings
Company Analysis and Financial Data Status
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2022/08/17 00:00 |
| End of Day Share Price | 2022/08/17 00:00 |
| Earnings | 2022/06/30 |
| Annual Earnings | 2021/12/31 |
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.