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Monster Beverage (MNST)
NASDAQ:MNST
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Monster Beverage
(NASDAQ:MNST)76Outperform
Positive Factors
Financial Performance
Sales and margins for the quarter have exceeded expectations, indicating strong financial performance despite challenges.
Revenue Growth
International revenue showed solid growth with 19.9% FX-neutral growth in Q4.
Negative Factors
Market Competition
Management's strategy to compete in the functional/better-for-you space did not inspire confidence, with MNST losing share to better-for-you/functional competitors.
Monster Beverage (MNST) vs. S&P 500 (SPY)
Market Cap
$53.15B
Dividend YieldN/A
Average Volume (3M)7.22M
Price to Earnings (P/E)36.8
Beta (1Y)0.52
Revenue Growth4.94%
EPS Growth-4.13%
CountryUS
Employees6,003
SectorConsumer Defensive
Sector Strength73
IndustryBeverages - Non-Alcoholic
Share Statistics
EPS (TTM)1.48
Shares Outstanding972,519,650
10 Day Avg. Volume8,093,572
30 Day Avg. Volume7,220,906
Financial Highlights & Ratios
PEG Ratio6.90
Price to Book (P/B)N/A
Price to Sales (P/S)7.17
Price to Cash Flow (P/CF)21.50
P/FCF Ratio23.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$57.44Price Target Upside4.78% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering18
Monster Beverage Business Overview & Revenue Model
Company DescriptionMonster Beverage Corporation is a leading American beverage company that specializes in the development, marketing, and sale of energy drinks and alternative beverages. Headquartered in Corona, California, the company operates in the non-alcoholic beverage sector, primarily focusing on energy drinks under the flagship Monster Energy brand. Monster Beverage's product portfolio includes a variety of energy drinks, including Monster Energy, Java Monster, and Monster Hydro, catering to diverse consumer preferences across global markets.
How the Company Makes MoneyMonster Beverage Corporation generates revenue primarily through the sale of its energy drink products. The company's revenue model is centered on its extensive portfolio of energy drinks, which are distributed and sold in over 100 countries worldwide. A significant portion of its earnings is derived from the Monster Energy brand, which enjoys a strong market presence and brand recognition. Monster Beverage's distribution network includes a mix of direct-store delivery and partnerships with bottlers and distributors, ensuring wide availability of its products. The company also benefits from strategic marketing and sponsorships, particularly in motorsports and extreme sports, which enhance brand visibility and consumer engagement. Additionally, Monster Beverage engages in partnerships and joint ventures with other beverage companies, such as The Coca-Cola Company, which holds a minority stake in Monster and supports its distribution efforts through its vast network.
Monster Beverage Financial Statement Overview
Summary
Monster Beverage demonstrates strong financial health with robust profitability, effective cost management, and low leverage. The income statement shows high margins and consistent growth, the balance sheet indicates financial stability, and cash flow data reflects efficient cash management. The slight decrease in equity is a minor concern.Income Statement
Monster Beverage demonstrates strong income statement metrics with robust gross profit and net profit margins. The TTM gross profit margin is approximately 53.76%, and the net profit margin is about 21.66%, indicating healthy profitability. The revenue growth rate from 2023 to TTM is approximately 3.79%, showcasing continued growth. EBIT and EBITDA margins are both strong, reflecting efficient operations and cost management. Overall, the company shows excellent financial performance with consistent growth and high profitability.90
Very Positive
Balance Sheet
The balance sheet of Monster Beverage indicates a solid financial position with a strong equity ratio of approximately 71.76% as of TTM, highlighting financial stability. The debt-to-equity ratio is 0.13, reflecting low leverage and a conservative capital structure. The return on equity (ROE) is about 27.78%, suggesting effective use of equity to generate profits. Overall, the balance sheet is strong, with low debt levels and high equity, although the slight decrease in stockholders' equity indicates potential concerns about shareholder value growth.85
Very Positive
Cash Flow
Monster Beverage's cash flow statement shows a strong cash generation capability with a TTM operating cash flow to net income ratio of 1.18, indicating efficient conversion of net income into cash. The free cash flow growth rate is around 9.63% from 2023 to TTM, demonstrating strong cash flow generation. The free cash flow to net income ratio is 1.01, reinforcing efficient cash management. The cash flow statement reflects a solid ability to generate and manage cash, supporting operational and strategic initiatives.88
Very Positive
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 7.41B | 7.14B | 6.31B | 5.54B | 4.60B | 4.20B | Gross Profit |
| 3.98B | 3.79B | 3.17B | 3.11B | 2.72B | 2.52B | EBIT |
| 1.98B | 1.95B | 1.58B | 1.80B | 1.63B | 1.40B | EBITDA |
| 2.06B | 2.02B | 1.58B | 1.80B | 1.63B | 1.40B | Net Income Common Stockholders |
| 1.61B | 1.63B | 1.19B | 1.38B | 1.41B | 1.11B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 3.25B | 3.25B | 2.67B | 3.08B | 2.06B | 1.33B | Total Assets |
| 9.69B | 9.69B | 8.29B | 7.80B | 6.20B | 5.15B | Total Debt |
| 66.02M | 66.02M | 45.93M | 28.18M | 18.14M | 28.46M | Net Debt |
| -2.23B | -2.23B | -1.26B | -1.30B | -1.16B | -769.49M | Total Liabilities |
| 1.46B | 1.46B | 1.27B | 1.24B | 1.04B | 979.07M | Stockholders Equity |
| 8.23B | 8.23B | 7.03B | 6.57B | 5.16B | 4.17B |
| Cash Flow | Free Cash Flow | ||||
| 1.63B | 1.48B | 675.55M | 1.10B | 1.30B | 1.00B | Operating Cash Flow |
| 1.90B | 1.72B | 887.70M | 1.16B | 1.36B | 1.11B | Investing Cash Flow |
| 1.01B | -193.40M | -161.37M | -992.02M | -472.49M | -326.72M | Financing Cash Flow |
| -3.08B | -542.60M | -706.94M | 34.82M | -526.07M | -628.51M |
Monster Beverage Technical Analysis
Positive
54.82
Price Trends
50.45
Positive
51.93
Positive
51.04
Positive
Market Momentum
1.29
Negative
69.05
Neutral
75.11
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MNST, the sentiment is Positive. The current price of 54.82 is above the 20-day moving average (MA) of 50.42, above the 50-day MA of 50.45, and above the 200-day MA of 51.04, indicating a bullish trend. The MACD of 1.29 indicates Negative momentum. The RSI at 69.05 is Neutral, neither overbought nor oversold. The STOCH value of 75.11 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MNST.
Monster Beverage Risk Analysis
Monster Beverage disclosed 39 risk factors in its most recent earnings report. Monster Beverage reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Monster Beverage Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $301.89B | 28.52 | 42.77% | 2.68% | 1.96% | -0.45% | |
76 Outperform | $53.15B | 36.83 | 25.33% | ― | 4.94% | -4.13% | |
76 Outperform | $45.48B | 31.83 | 5.94% | 2.65% | 3.62% | -32.23% | |
74 Outperform | $6.09B | 58.54 | 11.85% | ― | 2.85% | -43.53% | |
70 Outperform | $3.73B | 20.38 | 31.59% | ― | 0.73% | 12.96% | |
69 Neutral | $210.48B | 22.08 | 53.09% | 3.42% | 0.42% | 5.77% | |
63 Neutral | $20.85B | 13.27 | -10.88% | 7.48% | 1.13% | 11.50% |
* Consumer Defensive Sector Average
Performance Comparison
MNST
Monster Beverage
54.82
-3.07
-5.30%
KO
Coca-Cola
70.19
12.43
21.52%
KDP
Keurig Dr Pepper
33.60
5.28
18.64%
FIZZ
National Beverage
40.22
-8.17
-16.88%
PEP
PepsiCo
154.19
-4.02
-2.54%
CELH
Celsius Holdings
25.90
-60.83
-70.14%
Monster Beverage Earnings Call Summary
Earnings Call Date: Feb 27, 2025 | % Change Since: 5.59% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a mixed sentiment with strong international sales and product innovation being offset by significant impairment charges, increased operating expenses, and challenges in the U.S. market. Natural disasters also played a role in disrupting operations. Despite these challenges, there are positive signs of growth, especially in international markets.Highlights
Record Fourth Quarter Net Sales
The company achieved record fourth quarter net sales of $1.81 billion in the 2024 fourth quarter, 4.7% higher than net sales of $1.73 billion in the comparable 2023 quarter.
Strong International Performance
Net sales to customers outside the U.S. were $711.5 million, representing 39.3% of total net sales in the 2024 fourth quarter, compared to 36.8% in 2023. Significant growth was reported in EMEA, Asia-Pacific, and Latin America on a currency-neutral basis.
Gross Profit Margin Improvement
Gross profit as a percentage of net sales for the 2024 fourth quarter was 55.3%, compared with 54.2% in the 2023 fourth quarter, primarily due to reduced input costs.
Market Share Growth in Key Regions
Monster gained market share in several regions including Belgium, Great Britain, Germany, and Brazil, with notable sales increases in countries like Argentina (82.5% increase) and South Korea (14.8% increase).
Successful Product Launches
New product launches such as Monster Ultra Vice Guava and other innovations across various brands received positive responses from consumers and customers.
Lowlights
Significant Impairment Charges
Operating expenses for the 2024 fourth quarter were adversely impacted by $130.7 million of impairment charges related to the Alcohol Brands segment.
Decline in U.S. Market Share and Sales
Sales of Reign decreased by 6.3% and Full Throttle by 0.8% in the U.S. market. Market share of Monster in the convenience and gas channel slightly decreased from 36.8% to 36.9%.
Impact of Natural Disasters
Hurricanes Helene and Milton, along with California wildfires, adversely impacted sales, particularly affecting production and shipping in certain U.S. states.
Increased Operating Expenses
Operating expenses for the 2024 fourth quarter increased to $621.2 million, largely due to increased payroll, sponsorship, and legal expenses.
Foreign Currency Exchange Impact
Net changes in foreign currency exchange rates had an unfavorable impact on net sales for the 2024 fourth quarter, with a negative impact of $52.3 million.
Company Guidance
During the Monster Beverages Company's fourth quarter and full-year 2024 conference call, the company highlighted several key metrics and trends. Net sales reached a record $1.81 billion in Q4 2024, up 4.7% from $1.73 billion in Q4 2023, and increased 7.8% on a foreign currency adjusted basis. The energy drink category experienced significant growth globally, with Nielsen data indicating a 6.2% increase in the U.S. energy drink market for the 13 weeks ended February 15, 2025. EMEA, APAC, and LatAm also saw notable growth rates of approximately 14.4%, 11.8%, and 20.2%, respectively. Adjusted operating income for Q4 2024 rose 7.9% to $517.9 million, while diluted earnings per share, adjusted for certain items, remained stable at $0.38. The company faced challenges such as the impact of Hurricanes Helene and Milton and a $130.7 million impairment charge in the Alcohol Brands segment. Despite these hurdles, the company plans to continue expanding their innovation pipeline and exploring pricing opportunities domestically and internationally. Adjusted net income per diluted share for the full year 2024 was $1.62, compared to $1.56 in 2023.Monster Beverage Corporate Events
Shareholder MeetingsBusiness Operations and Strategy
Monster Beverage Announces Investor Meeting for 2025
Neutral
Jan 21, 2025
On January 21, 2025, Monster Beverage Corporation’s Co-Chief Executive Officers and senior management will host an investor meeting to discuss the company’s business and operations. The presentation will be webcast live and archived on the company’s website. The announcement highlights Monster’s strategic growth efforts, emphasizing its global distribution reach and market leadership in energy drinks, while also addressing potential risks such as economic uncertainties, geopolitical tensions, and changes in consumer preferences.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.