Monster Beverage Corp (MNST, Financial) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at $51.01, Monster Beverage Corp has witnessed a daily loss of 1.03%, marked against a three-month change of -1.55%. A thorough analysis, underlined by the GF Score, suggests that Monster Beverage Corp is well-positioned for substantial growth in the near future.
What Is the GF Score?
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 10/10
- Profitability rank: 10/10
- Growth rank: 10/10
- GF Value rank: 10/10
- Momentum rank: 7/10
Each one of these components is ranked and the ranks also have a positive correlation with the long-term performances of stocks. The GF score is calculated using the five key aspects of analysis. Through backtesting, we know that each of these key aspects has a different impact on the stock price performance. Thus, they are weighted differently when calculating the total score. GuruFocus assigned Monster Beverage Corp the GF Score of 99 out of 100, which signals the highest outperformance potential.
Understanding Monster Beverage Corp Business
Monster Beverage Corp is a leader in the energy drink subsegment of the nonalcoholic beverage market, generating two-thirds of its revenue in the US and Canada. The well-known Monster trademark includes brands such as Monster Energy, Monster Ultra, Java Monster, and Juice Monster. The firm also owns other energy drink brands, such as Reign, NOS, Burn, Bang, and Mother, and brews and distributes beers and flavored malt beverages following the acquisition of a craft brewer in 2022. Monster controls branding and innovation but outsources beverage manufacturing and packaging to copackers and finished goods distribution to bottlers in the global Coca-Cola system (pursuant to a 20-year agreement inked in 2015). Coke is the largest shareholder of Monster with a 19.5% stake.
Financial Strength Breakdown
According to the Financial Strength rating, Monster Beverage Corp's robust balance sheet exhibits resilience against financial volatility, reflecting prudent management of capital structure. The Interest Coverage ratio for Monster Beverage Corp stands impressively at 340.73, underscoring its strong capability to cover its interest obligations. This robust financial position resonates with the wisdom of legendary investor Benjamin Graham, who favored companies with an interest coverage ratio of at least 5.
With an Altman Z-Score of 16.63, Monster Beverage Corp exhibits a strong defense against financial distress, highlighting its robust financial stability. With a favorable Debt-to-Revenue ratio of 0.1, Monster Beverage Corp's strategic handling of debt solidifies its financial health.
Profitability Rank Breakdown
The Profitability Rank shows Monster Beverage Corp's impressive standing among its peers in generating profit. Monster Beverage Corp's strong Predictability Rank of 4.0 stars out of five underscores its consistent operational performance, providing investors with increased confidence.
Growth Rank Breakdown
Ranked highly in Growth, Monster Beverage Corp demonstrates a strong commitment to expanding its business. The company's 3-Year Revenue Growth Rate is 16.2%, which outperforms better than 66.98% of 106 companies in the Beverages - Non-Alcoholic industry. Moreover, Monster Beverage Corp has seen a robust increase in its earnings before interest, taxes, depreciation, and amortization (EBITDA) over the past few years. Specifically, the three-year growth rate stands at 6.5, and the rate over the past five years is 8.6. This trend accentuates the company's continued capability to drive growth.
Conclusion
Monster Beverage Corp's financial strength, profitability, and growth metrics, as highlighted by the GF Score, underscore the firm's unparalleled position for potential outperformance. With a strong balance sheet, impressive profitability, and consistent growth, Monster Beverage Corp is well-equipped to navigate future challenges and capitalize on opportunities within the energy drink market. For investors seeking companies with strong GF Scores, GuruFocus Premium members can explore more options using the following screener link: GF Score Screen.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
