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MNST

Monster Beverage NasdaqGS:MNST Stock Report

Last Price

US$91.51

Market Cap

US$48.2b

7D

1.9%

1Y

-4.5%

Updated

17 Aug, 2022

Data

Company Financials +
MNST fundamental analysis
Snowflake Score
Valuation2/6
Future Growth4/6
Past Performance2/6
Financial Health6/6
Dividends0/6

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

Summary of all time highs, changes and price drops for Monster Beverage
Historical stock prices
Current Share PriceUS$91.51
52 Week HighUS$99.81
52 Week LowUS$71.78
Beta0.92
1 Month Change-3.69%
3 Month Change5.48%
1 Year Change-4.54%
3 Year Change57.69%
5 Year Change65.90%
Change since IPO219,527.51%

Recent News & Updates

Aug 15

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

Aug 11
Is Monster Beverage Corporation (NASDAQ:MNST) Trading At A 48% Discount?

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

MNSTUS BeverageUS Market
7D1.9%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

Is MNST's price volatile compared to industry and market?
MNST volatility
MNST Average Weekly Movement3.7%
Beverage Industry Average Movement6.5%
Market Average Movement7.6%
10% most volatile stocks in US Market17.0%
10% least volatile stocks in US Market3.1%

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

FoundedEmployeesCEOWebsite
19853,775Rodney Sackshttps://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

How do Monster Beverage's earnings and revenue compare to its market cap?
MNST fundamental statistics
Market CapUS$48.22b
Earnings (TTM)US$1.23b
Revenue (TTM)US$6.01b

39.3x

P/E Ratio

8.0x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
MNST income statement (TTM)
RevenueUS$6.01b
Cost of RevenueUS$2.90b
Gross ProfitUS$3.11b
Other ExpensesUS$1.89b
EarningsUS$1.23b

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)2.33
Gross Margin51.81%
Net Profit Margin20.40%
Debt/Equity Ratio0%

How did MNST perform over the long term?

See historical performance and comparison
We’ve recently updated our valuation analysis.

Valuation

Is MNST undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation 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.

MNST key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue7.6x
Enterprise Value/EBITDA27.1x
PEG Ratio2x

Price to Earnings Ratio vs Peers

How does MNST's PE Ratio compare to its peers?

MNST PE Ratio vs Peers
The above table shows the PE ratio for MNST vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average24.5x
KDP Keurig Dr Pepper
26.1x8.2%US$56.7b
KOF Coca-Cola FEMSA. de
15.8x12.8%US$13.2b
PEP PepsiCo
26.9x3.4%US$248.7b
KO Coca-Cola
29.3x5.5%US$280.6b
MNST Monster Beverage
39.3x19.2%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.

MNST PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio39.3x
Fair PE Ratio32.3x

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

4/6

Future 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

2/6

Past 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

6/6

Financial 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

0/6

Dividend 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

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/08/17 00:00
End of Day Share Price2022/08/17 00:00
Earnings2022/06/30
Annual Earnings2021/12/31


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.