Corona, California-based Monster Beverage Corporation (MNST) develops, markets, sells, and distributes energy drink beverages and concentrates. Valued at a market cap of $53.6 billion, the company has a diverse product portfolio catering to different consumer preferences, including sugar-free and functional beverages.
Companies valued at $10 billion or more are typically classified as “large-cap stocks,” and MNST fits the label perfectly, with its market cap exceeding this threshold, underscoring its size, influence, and dominance within the beverages industry. The company has an extensive distribution network, benefiting from its strategic partnership with Coca-Cola, which owns a significant stake in the company and helps distribute its products worldwide. One of its key strengths is its strong brand recognition and loyal consumer base, which has helped it dominate the global energy drink market.
This beverage company is currently trading 9% below its 52-week high of $61.21, reached on Mar. 18, 2024. Shares of MNST have gained 4.4% over the past three months, outpacing the First Trust Nasdaq Food & Beverage ETF’s (FTXG) 4% decline during the same time frame.
Moreover, on a YTD basis, shares of Monster Beverage are up 4.8%, outperforming FTXG’s marginal rise. However, in the longer term, MNST has declined 8.6% over the past 52 weeks, underperforming FTXG’s 3.9% drop.
To confirm its recent bullish trend, MNST began trading above its 200-day and 50-day moving averages in mid-February.
On Feb. 27, MNST released its Q4 earnings results. Shares of the company rose 5.3% the following day as it delivered record Q4 revenue of $1.8 billion, which topped the forecasted figure by 1.1% and improved 4.7% year-over-year. Moreover, its flagship Monster brand recorded 13.7% year-over-year growth in the fourth quarter, increasing its energy drink market share from 29.3% to 30%, further bolstering investor confidence. However, on the downside, its adjusted earnings of $0.38 missed Wall Street’s expectations of $0.40. A notable 23.2% increase in operating expenses due to higher selling, general, and administrative expenses mainly led to its bottom-line miss.
MNST has lagged behind its rival, Keurig Dr Pepper Inc.’s (KDP) 15.8% gain over the past 52 weeks but has slightly outpaced KDP’s 4.6% rise on a YTD basis.
Looking at MNST’s recent outperformance relative to its industry peers, analysts remain moderately optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 21 analysts covering it, and the mean price target of $56.86 suggests a modest 3.2% premium to its current levels.
On the date of publication, Neharika Jain did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
