Introduction
Monster Beverage Corp (MNST) is one of the leading energy drink companies in the world, with a portfolio of popular brands such as Monster Energy, Reign, NOS, and Full Throttle. The company has been growing rapidly in recent years, thanks to its strong brand recognition, loyal customer base, product innovation, and global expansion.
Here are some of the latest and notable developments of the company:
- The company entered into new markets and regions in 2020 and 2021, such as India, China, Brazil, and Russia.
- The company delivered a remarkable return of over 100,000% from its IPO price of $0.04 (adjusted for stock dividends) to its closing price of $40.67 as of September 6th, 2023.
- The company received positive ratings and price targets from several analysts who cover the stock, with an average price target of $42.94 and an implied upside potential of 5.6% from the current stock price
Monster Beverage Corp's Overview
Source: Alarmy
Monster Beverage Corp was founded in 1935 by Hubert Hansen as Hansen's Juices, a company that produced natural fruit juices and sodas. The company changed its name to Hansen Natural Corporation in 1998 and started to focus on energy drinks and alternative beverages.
Today, Monster Beverage Corp is the world's second-largest energy drink company by revenue, headquartered in Corona, California. The company has three main segments: Monster Energy Drinks, Strategic Brands, and Other. The company is led by CEO Rodney Sacks, who joined Hansen Natural Corporation in 1990 and became the chief executive in 1996. Some of the top shareholders of Monster Beverage Corp are The Coca-Cola Company, Vanguard Group, BlackRock, and State Street.
Monster Beverage Corp has achieved many milestones in its history, such as:
- Launching the first Monster Energy drink in 2002
- Acquiring various brands such as NOS, Full Throttle, Burn, Mother, and Relentless
- Forming a strategic partnership with The Coca-Cola Company in 2015
- Expanding its global presence to more than 150 countries
- Introducing new products such as Monster Hydro, Monster Ultra, Monster MAXX, and Monster Espresso
Monster Beverage Corp's Business Model and Products/Services
Source: Food Business
Monster Beverage makes money by developing, marketing, selling, and distributing energy drink beverages and concentrates. The company operates through three segments: Finished Products, Concentrate, and Other.
- The Finished Product segment sells ready-to-drink energy drinks directly to retailers or through distributors. This segment accounted for 92% of the company's revenue in 2023.
- The Concentrate segment sells beverage bases and/or ingredients to authorized bottling and canning operations that produce finished products for sale. This segment accounted for 7% of the company's revenue in 2023.
- The Other segment sells other products that are not classified as energy drinks or concentrates, such as natural sodas and juices. This segment accounted for 1% of the company's revenue in 2023.
The company's revenue is mainly derived from North America (69% of total revenue), followed by Europe (16%), Asia Pacific (7%), Latin America (4%), Middle East and Africa (3%), and Other (1%).
Monster Beverage Corp makes money by selling beverages to customers across various channels and markets. The company's main products and services include:
- Monster Energy Drinks: Energy drinks that contain caffeine, taurine, guarana, vitamins, and other ingredients that provide energy and stimulation
- Strategic Brands: Energy drinks that are owned or licensed by The Coca-Cola Company, such as NOS, Full Throttle, Burn, Mother, Relentless, Powerade, and Honest Tea
- Other: Other beverages such as natural juices, sodas, teas, lemonades, sparkling waters, and sports drinks
Monster Beverage Corp serves a wide range of customers such as distributors, retailers, convenience stores, grocery stores, drug stores, club stores, mass merchandisers, specialty chains, food service outlets, and consumers. The company's products are used for various purposes such as enhancing performance, alertness, concentration, mood, and enjoyment.
Monster Beverage Corp's Financials, Growth, and Valuation Metrics
Monster Beverage Corp has a strong financial position with consistent revenue growth, high profitability, and solid cash flow generation. The company's financial highlights for fiscal year 2023 (ended December 31) are:
- Revenue: $4.6 billion, up 9% year-over-year
- Net Income: $1.3 billion, up 12% year-over-year
- Earnings per Share (EPS): $2.35, up 13% year-over-year
- Gross Margin: 60%, up 1 percentage point year-over-year
- Operating Margin: 38%, up 1 percentage point year-over-year
- Return on Equity (ROE): 28%, up 1 percentage point year-over-year
- Free Cash Flow (FCF): $1.2 billion, up 11% year-over-year
- Cash and Short-Term Investments: $1.1 billion, up 17% year-over-year
- TotDal ebt: $0, down 100% year-over-year
Key financial ratios and metrics
Source: The Gamer
To evaluate the company's valuation relative to its peers and the industry, we can use some common financial ratios and metrics such as price-to-earnings (P/E), price-to-sales (P/S), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA). These ratios measure how much investors are willing to pay for a company's earnings, sales, assets, or cash flows.
As of September 6th, 2023, the company's ratios are as follows:
- P/E: 43.1
- P/S: 8.58
- P/B: 8.53
- EV/EBITDA: 24.7
To compare these ratios with the company's peers and the industry averages, we can use the following table:
|
Company |
P/E |
P/S |
P/B |
EV/EBITDA |
|
Monster Beverage Corp |
43.1 |
8.58 |
8.53 |
24.7 |
|
Keurig Dr Pepper Inc |
31.6 |
4.06 |
2.07 |
15.5 |
|
Coca-Cola Co |
28.9 |
6.96 |
11.65 |
22 |
|
PepsiCo Inc |
25.4 |
3 |
14.64 |
16 |
|
Industry Average |
28.7 |
4.65 |
9.47 |
19 |
Based on this table, we can see that Monster Beverage Corp is trading at a premium to its peers and the industry on most of the valuation multiples. This suggests that investors have high expectations for the company's future growth and profitability, and are willing to pay a higher price for its shares. However, this also implies that the company faces higher risks of disappointing the market if it fails to meet or exceed those expectations.
MNST Stock Performance Analysis
MNST Stock trading information
Monster Beverage stock is listed on the Nasdaq Global Select Market under the ticker symbol MNST. The stock is traded in US dollars (USD) and is subject to the trading hours of the Nasdaq exchange, which are from 9:30 a.m. to 4:00 p.m. Eastern Time (ET) on weekdays, excluding US market holidays. The stock also has pre-market and after-market trading sessions, which are from 4:00 a.m. to 9:30 a.m. ET and from 4:00 p.m. to 8:00 p.m. ET, respectively.
MNST Stock Split
MNST stock has never undergone any stock splits since its IPO in 1995. However, the company has issued several stock dividends over the years, which have increased the number of shares outstanding without changing the total value of the company. The most recent stock dividend was in 2012 when the company issued a two-for-one stock dividend.
Monster Beverage Stock Dividend
MNST stock does not pay any cash dividends to its shareholders, as the company prefers to reinvest its earnings back into its business or use them for share repurchases.
MNST Stock Price Performance Since its IPO
Monster Energy stock has been one of the best-performing stocks in the US market since its IPO in 1995. The stock has delivered a staggering return of over 100,000% from its IPO price of $0.04 (adjusted for stock dividends) to its closing price of $40.67 as of September 6th, 2023. This means that an investment of $1,000 in MNST stock at its IPO would have grown to over $10 million today.
The following chart shows the historical price performance of MNST stock from January 1996 to September 2023:
Source: TradingView
As we can see from the chart, MNST stock has experienced several periods of rapid growth and volatility over the years. Some of the key drivers of MNST stock price are:
- The launch and success of Monster Energy and other energy drink brands, which boosted the company's sales and market share in the fast-growing energy drink category.
- The strategic partnership with The Coca-Cola Company, which gave Monster Beverage access to Coca-Cola's global distribution network and enhanced its brand visibility and recognition.
- The product innovation and diversification, which enabled the company to offer new flavors, formats, and functionalities to meet different consumer needs and preferences.
- The global expansion, which allowed the company to enter new markets and regions with high growth potential and demand for energy drinks.
- The strong financial performance, which demonstrated the company's ability to generate consistent revenue growth, high profitability margins, positive cash flows, and shareholder value.
- The share repurchases, which reduced the number of shares outstanding and increased the earnings per share and return on equity of the company.
MNST Stock Forecast
To forecast the future price movement of MNST stock, we can use technical analysis tools such as support and resistance levels, trend lines, moving averages, and indicators. These tools can help us identify the direction, strength, and momentum of the stock price trend, as well as potential entry and exit points for trading.
The following chart shows some technical analysis tools applied to MNST stock price from January 2020 to September 2023:
Source: TradingView
As we can see from the chart, MNST stock has been in a strong uptrend since March 2020, when it bounced off its support level at around $25. The stock has been making higher highs and higher lows, forming an ascending channel that defines its bullish trend. The stock has also been trading above its 50-day and 200-day moving averages (MA), which act as dynamic support levels that confirm the uptrend.
The stock recently broke above its previous resistance level at around $40, reaching a new all-time high of $56.37 on March 8th, 2023. This indicates that the buyers are in control and that there is a strong demand for the stock. The stock is also showing positive momentum, as evidenced by its rising relative strength index (RSI) and moving average convergence divergence (MACD) indicators.
Based on these technical analysis tools, we can forecast that MNST stock will continue its uptrend in the future, as long as it stays within or above its ascending channel and above its moving averages. The next resistance level for the stock could be at around $64, which is derived by adding the width of the channel ($8) to the breakout point ($56). The next support level for the stock could be at around $48, which is the midpoint of the channel.
However, we should also be aware of the potential risks and uncertainties that could affect the stock price, such as:
- The competition from other energy drink companies, such as Red Bull, Rockstar, and Bang, which could erode Monster Beverage's market share and pricing power.
- The regulatory and legal challenges, such as the lawsuits, investigations, and bans that the company has faced in the past over its product safety, labeling, marketing, and distribution practices.
- The consumer preferences and trends, such as the shift to healthier and natural alternatives, which could reduce the demand for energy drinks or create new opportunities for product innovation.
- The macroeconomic and market conditions, such as the impact of the COVID-19 pandemic, inflation, interest rates, exchange rates, and consumer confidence, which could affect the company's sales, costs, margins, and earnings.
Therefore, we should also consider the fundamental analysis of the company's business performance, growth prospects, valuation, and competitive advantages when forecasting MNST stock price.
To get a more comprehensive and objective view of the MNST stock forecast, we can also look at the consensus analyst recommendations and price targets from major research firms. According to MarketBeat, as of March 8th, 2023, 21 analysts are covering MNST stock, with the following ratings:
Buy: 15
Hold: 6
Sell: 0
The average price target from these analysts is $61.71, with a high of $72 and a low of $50. This implies an upside potential of 10.14% from the current stock price of $56.37. It should be noted that these price targets are based on different assumptions, methodologies, and time horizons, and may not reflect the actual future performance of MNST stock.
Challenges and Opportunities
Competitive Risks
One of the main challenges that Monster Beverage faces is the intense competition in the energy drink market. The company competes with several other energy drink companies that offer similar or alternative products to consumers. Some of the company's main competitors are:
- Red Bull GmbH:The market leader in the global energy drink industry, with a market share of 46% in 2023. Red Bull is known for its iconic brand image, slogan (“Red Bull gives you wings”), marketing campaigns (such as sponsoring extreme sports and events), and product innovation (such as launching new flavors and formats).
- Rockstar Inc: A subsidiary of PepsiCo Inc., with a market share of 9% in 2023. Rockstar is known for its aggressive pricing strategy (offering larger cans at lower prices), product variety (offering over 30 flavors and types), and celebrity endorsements (such as rapper Lil Wayne and actor Jason Statham).
- Vital Pharmaceuticals Inc:The maker of Bang energy drink, with a market share of 11% in 2023. Bang is known for its high caffeine content (300 mg per can), functional ingredients (such as BCAAs, coenzyme Q10, creatine, and ketones), and social media presence (such as partnering with influencers and fitness models).
Source: Barco Delive
These competitors pose a threat to Monster Beverage's market share and pricing power, as they can offer similar or better products to consumers at lower or comparable prices. They can also leverage their distribution networks, marketing budgets, customer loyalty, and brand awareness to gain an edge over Monster Beverage.
To overcome these competitive risks, Monster Beverage needs to maintain its competitive advantages over its rivals. Some of these advantages are:
- It has strong brand recognition and a reputation as one of the leading energy drink companies in the world.
- Its loyal customer base that consists of mainly young adults who are looking for a boost of energy and excitement.
- Its product innovation and diversification that enable it to offer new flavors, formats, and functionalities to meet different consumer needs and preferences.
- Its global expansion that allows it to enter new markets and regions with high growth potential and demand for energy drinks.
- Its strategic partnership with The Coca-Cola Company that gives it access to Coca-Cola's global distribution network and enhances its brand visibility and recognition.
Other Risks
Monster Beverage Corp also faces some other risks that could adversely affect its business operations or financial results, such as:
- Supply chain disruptions or ingredient shortages that could limit its production capacity or increase its costs
- Health concerns or lawsuits that could affect its product safety or consumer perception
- Legal disputes or regulatory actions that could result in fines, penalties, injunctions, or reputational damage
- Macroeconomic uncertainties or geopolitical tensions that could affect its global sales or operations
- Currency fluctuations or tax changes that could impact its foreign exchange rates or effective tax rates
Growth Opportunities
Source: Reuters
Despite these risks, Monster Beverage Corp has some growth opportunities that could enable it to expand its market share, revenue streams, customer base, and competitive advantages. Some of these opportunities are:
- Leveraging its strong position in the energy drink market to capture the growing demand for energy drinks and alternative beverages in various regions and channels
- Capitalizing on its strategic partnership with The Coca-Cola Company to access new markets, customers, distribution networks, and resources
- Investing in research and development and acquisitions to enhance its product innovation and differentiation capabilities
- Benefiting from the increasing consumer preference for healthier, natural, organic, and functional beverages
- Enhancing its social responsibility and environmental sustainability initiatives to support its mission of delivering happiness to consumers
Future Outlook and Expansion
Monster Beverage Corp has a positive outlook for its future growth and expansion, as it continues to leverage its competitive advantages, overcome its challenges, and capitalize on its opportunities. The company has several plans and initiatives to enhance its business performance and stock price in the future. Some of these plans and initiatives are:
- Launching new alcohol products: The company plans to launch its new alcohol product lines in 2023, which include Monster Hard Seltzer, Monster Malt Liquor, and Monster Vodka.
- Expanding into new categories and segments: The company plans to expand into new categories and segments that are complementary or adjacent to its core energy drink business, such as sports drinks, wellness drinks, coffee drinks, tea drinks, juice drinks, water drinks, and more.
- Increasing its international presence and penetration: The company plans to increase its international presence and penetration in existing and new markets and regions with high growth potential and demand for energy drinks.
- Improving its operational efficiency and profitability: The company plans to improve its operational efficiency and profitability by optimizing its supply chain, distribution network, retail operations, and consumer behavior.
Trading Strategies for MNST Stock
If you are interested in trading MNST stock, you need to have a clear trading plan that includes your trading objectives, risk appetite, time horizon, entry and exit points, stop-loss and take-profit levels, and trading tools. You also need to choose a suitable trading method that matches your trading style and personality. There are various trading methods that you can use to trade MNST stock, such as:
CFD Trading: CFD stands for contract for difference, which is a type of derivative trading that allows you to speculate on the price movements of an underlying asset without owning or delivering the asset. MNST traders have several advantages over traditional stock traders, such as:
- They can trade on both rising and falling markets, by going long (buying) or short (selling) the CFD.
- They can trade with leverage, which means that you can use a small amount of capital to control a larger position and magnify your potential profits or losses.
- They can access a wider range of markets and instruments, such as indices, commodities, currencies, cryptocurrencies, and more.
Technical Analysis: Technical analysis is based on the assumption that the price reflects all the relevant information about the asset and that history tends to repeat itself. Technical analysis can help you find optimal entry and exit points for your trades, as well as manage your risk and reward ratios. Some of the technical analysis tools that you can use to trade MNST stock are:
- Trend lines: You can use trend lines to identify support and resistance levels, trend reversals, breakouts, pullbacks, and continuations.
- Moving averages: You can use moving averages to smooth out the price fluctuations and identify the direction and strength of the trend.
- Indicators: Indicators are mathematical calculations that are applied to the price or volume data of an asset to measure various aspects of its performance
Fundamental Analysis: Fundamental analysis can help you evaluate the long-term potential and sustainability of an asset, as well as identify undervalued or overvalued assets. Some of the fundamental analysis tools that you can use to trade MNST stock are:
- Financial statements: You can also compare these ratios and metrics to its peers and the industry averages to determine its relative strengths and weaknesses.
- Earnings reports: You can use earnings reports to assess whether a company has met or exceeded its expectations and how it has performed compared to its previous periods and forecasts.
- Analyst ratings and price targets: You can use analyst ratings and price targets to get a consensus view of how bullish or bearish the market is on a company or its stock.
Source: BevNet
Trade MNST Stock CFD with VSTAR
If you want to trade MNST stock CFD with VSTAR, you need to open an account with VSTAR first. VSTAR is a leading online trading platform that offers low-cost and high-leverage trading on various financial instruments.
Some of the benefits or advantages of trading MNST stock CFD with VSTAR are:
- You can trade on both rising and falling markets, by going long (buying) or short (selling) the CFD.
- You can trade with leverage up to 1:200, which means that you can use a small amount of capital to control a larger position and magnify your potential profits or losses.
- You can access a wide range of markets and instruments, such as US stocks (including MNST), global indices (such as S&P 500), commodities (such as gold), currencies (such as EUR/USD), cryptocurrencies (such as Bitcoin), and more.
- You can trade with low fees and commissions, as you only pay the bid-ask spread and overnight financing charges.
- You can benefit from advanced trading tools and features, such as charts, You can benefit from advanced trading tools and features, such as charts, indicators, signals, alerts, orders, risk management tools, and more.
- You can enjoy a user-friendly and secure trading platform, which is compatible with various devices and operating systems.
Conclusion
MNST stock is one of the best-performing stocks in the US market, with a remarkable return of over 100,000% since its IPO in 1995. The stock has been driven by the company's strong brand recognition, loyal customer base, product innovation, global expansion, and strategic partnership with The Coca-Cola Company. The company has also delivered consistent revenue growth, high profitability margins, positive cash flow, and shareholder value.
However, MNST stock also faces some challenges and risks that could affect its future performance and price. The company competes with several other energy drink companies that offer similar or alternative products to consumers. The company's business performance and stock price are also influenced by the macroeconomic and market conditions that could affect its sales, costs, margins, earnings, and growth prospects.
Therefore, if you want to trade MNST stock, you need to have a clear trading plan that includes your trading objectives, risk appetite, time horizon, entry and exit points, stop-loss and take-profit levels, and trading tools. You also need to choose a suitable trading method that matches your trading style and personality. You can use various trading methods such as CFD trading, technical analysis, or fundamental analysis to trade MNST stock.
