Monster Beverage logged a 0.1% change during today's afternoon session, and is now trading at a price of $55.22 per share.
Monster Beverage returned losses of -47.0% last year, with its stock price reaching a high of $60.47 and a low of $47.13. Over the same period, the stock underperformed the S&P 500 index by -61.0%. As of April 2023, the company's 50-day average price was $52.67. 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. Based in Corona, CA, the large-cap Consumer Staples company has 4,607 full time employees. Monster Beverage has not offered a dividend during the last year.
Exceptional EPS Growth Obtained Primarily Through Share Buybacks:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (MM) | $3,807 | $4,201 | $4,599 | $5,541 | $6,311 | $6,923 |
| Gross Margins | 60% | 60% | 59% | 56% | 50% | 53% |
| Operating Margins | 34% | 34% | 36% | 33% | 25% | 28% |
| Net Margins | 26% | 26% | 31% | 25% | 19% | 23% |
| Net Income (MM) | $993 | $1,108 | $1,410 | $1,377 | $1,192 | $1,566 |
| Net Interest Expense (MM) | $10 | $13 | -$7 | n/a | -$13 | $98 |
| Depreciation & Amort. (MM) | $57 | $61 | n/a | $50 | $61 | $66 |
| Earnings Per Share | $0.88 | $1.01 | $1.32 | $1.29 | $2.23 | $3.1 |
| Diluted Shares (MM) | 1,129 | 1,093 | 1,070 | 1,071 | 533 | 505 |
| Free Cash Flow (MM) | $1,100 | $1,012 | $1,315 | $1,112 | $699 | $1,419 |
| Capital Expenditures (MM) | $62 | $102 | $49 | $44 | $189 | $163 |
| Net Current Assets (MM) | n/a | n/a | n/a | n/a | n/a | n/a |
| Net Debt / EBITDA | -0.36 | -0.46 | nan | -0.63 | -0.67 | -0.73 |
Monster Beverage has growing revenues and increasing reinvestment in the business, low leverage, and decent operating margins with a stable trend. However, the firm suffers from slimmer gross margins than its peers and exceptional EPS growth obtained primarily through share buybacks. Finally, we note that Monster Beverage has irregular cash flows.
The Market May Be Overvaluing Monster Beverage's Earnings and Assets:
Monster Beverage has a trailing twelve month P/E ratio of 35.8, compared to an average of 24.36 for the Consumer Staples sector. Based on its EPS guidance of $1.81, the company has a forward P/E ratio of 29.1. Monster Beverage's PEG ratio is 3.43 on the basis of the 10.5% weighted average of the company and the broader market's EPS compound average growth rates. This suggests that the company's shares are overvalued. Furthermore, Monster Beverage is likely overvalued compared to the book value of its equity, since its P/B ratio of 7.3 is higher than the sector average of 4.29. The company's shares are currently trading 140.7% above their Graham number.
Monster Beverage Has an Average Rating of Buy:
The 23 analysts following Monster Beverage have set target prices ranging from $55.0 to $72.0 per share, for an average of $61.37 with a buy rating. As of April 2023, the company is trading -14.2% away from its average target price, indicating that there is an analyst consensus of some upside potential.
Monster Beverage has an average amount of shares sold short because 2.1% of the company's shares are sold short. Institutions own 68.1% of the company's shares, and the insider ownership rate stands at 28.07%, suggesting a large amount of insider shareholders. The largest shareholder is Vanguard Group Inc, whose 6% stake in the company is worth $3,486,150,055.
