Monster Beverage Acquires Bankrupt Rival Bang Energy

Monster Beverage (NASDAQ:MNST) delivered better-than-expected fourth-quarter revenue, driving a 5% gain intra-day today. The energy drink giant reported $1.81 billion in revenue, slightly topping analyst expectations of $1.8 billion. Net sales climbed 4.7% year-over-year, with a stronger 7.8% increase when adjusted for foreign currency fluctuations.

Despite the revenue beat, adjusted earnings per share fell short, coming in at $0.38 compared to the $0.40 analyst forecast. This figure remained flat from the prior year’s fourth quarter.

On the profitability front, Monster saw an improvement in gross profit margin, which rose to 55.5% from 54.5% a year ago. The gains were driven by lower input costs, although regional sales variations somewhat offset the benefit.

The company implemented a 5% price increase across most of its U.S. brands starting November 1, 2024, contributing to revenue growth. International sales remained a strong growth driver, with net sales outside the U.S. climbing 11.7% to $711.5 million, making up 39.3% of total revenue, up from 36.8% in the same period last year.

• Monster Beverage Corporation (NASDAQ:MNST) is expected to report an earnings per share (EPS) of $0.40 for the fourth quarter of 2024, a 5.3% increase year over year.
• The company's revenue is projected to reach $1.79 billion, marking a 3.6% rise from the previous year.
• Financial metrics such as a price-to-earnings (P/E) ratio of approximately 31.69 and a debt-to-equity ratio of 0.13 highlight Monster Beverage's market valuation and financial health.

Monster Beverage Corporation, trading on NASDAQ under the symbol MNST, is a leading player in the energy drink market. Known for its popular Monster Energy brand, the company is headquartered in Corona, California. It operates through various subsidiaries, focusing on the development and marketing of energy drinks. As it prepares to release its fourth-quarter 2024 earnings, investors are keenly watching its performance.

For the upcoming earnings release on February 27, 2025, analysts expect Monster Beverage to report earnings per share (EPS) of $0.40. This represents a 5.3% increase from the same period last year. The company's revenue is projected to reach $1.79 billion, marking a 3.6% rise year over year. These figures suggest a positive growth trajectory despite challenges in the U.S. convenience channel.

Over the past 30 days, the consensus EPS estimate has been adjusted downward by 0.8%. Such revisions often influence investor sentiment and can impact short-term stock price movements. Historically, changes in earnings estimates have been closely linked to stock performance, making them a critical factor for investors to consider ahead of the earnings announcement.

Monster Beverage's financial metrics provide further insights into its market valuation. The company has a price-to-earnings (P/E) ratio of approximately 31.69, indicating how the market values its earnings. Its price-to-sales ratio is about 6.84, reflecting the market's valuation of its revenue. Additionally, the enterprise value to sales ratio is around 6.72, and the enterprise value to operating cash flow ratio is approximately 26.21.

The company's financial health is underscored by its low debt-to-equity ratio of 0.13, suggesting a conservative use of debt. Monster Beverage also maintains a strong liquidity position with a current ratio of approximately 3.13, indicating its ability to cover short-term liabilities with its short-term assets. As the earnings release approaches, these financial metrics will be closely monitored by investors.

Monster Beverage (NASDAQ:MNST) experienced a notable decline intra-day today, with shares dropping 10% following its second-quarter earnings report, which did not meet Street expectations.

The energy drink company reported adjusted earnings per share of $0.41, falling short of the anticipated $0.45. Revenue for the quarter reached $1.90 billion, under the forecasted $2.02 billion, though it marked a 2.5% year-over-year increase.

Monster's core energy drinks segment saw a 3.3% rise in net sales, totaling $1.74 billion. However, unfavorable foreign exchange rates negatively impacted overall net sales by $67.7 million.

Hilton H. Schlosberg, Vice Chairman and Co-Chief Executive Officer, noted a deceleration in growth within the energy drink category in the United States and other markets. He attributed this slowdown to reduced foot traffic in convenience stores and a retail shift towards mass and dollar channels.

Despite these challenges, Monster Beverage managed to improve its gross profit margins to 53.6%, up from 52.5% in the same quarter last year. This improvement was driven by lower freight costs and strategic pricing adjustments in certain markets.

Monster Beverage (NASDAQ:MNST) shares fell more than 2% pre-market today after JPMorgan analysts downgraded the company to Neutral from Overweight, lowering the price target from $66 to $59. The downgrade comes just before Monster Beverage's first-quarter 2024 earnings report on Wednesday, May 8th.

Despite the stock’s recent decline over the last month, the analysts see limited upside for the shares. They noted that anticipated price increases, previously a bullish argument, have lost their appeal due to rising aluminum costs and financial pressures on lower-income consumers in the U.S. and China. Additionally, both tracked and untracked sales channels show ongoing challenges, with data suggesting declines in household penetration and purchase rates.

Piper Sandler analysts upgraded Monster Beverage (NASDAQ:MNST) to an Overweight rating from Neutral and increased their price target to $63.00 from the previous $60.00. According to the analysts’ comments, although the Q2/23 results fell below expectations, there are no major concerns about the company's overall business or its near and long-term momentum. The energy drink category, in particular, is seen as highly promising, especially given the absence of private label competition.

Anticipating a promising future, the analysts project a robust 10-11% three-year revenue compound annual growth rate (CAGR). Additionally, there are expectations of a gross margin recovery, leading to an estimated 22-23% three-year EPS CAGR.

As a result of the positive outlook, the analysts raised the estimated earnings per share for 2023 from $1.51 to $1.60 and for 2024 from $1.82 to $1.90.

Piper Sandler analysts upgraded Monster Beverage (NASDAQ:MNST) to an Overweight rating from Neutral and increased their price target to $63.00 from the previous $60.00. According to the analysts’ comments, although the Q2/23 results fell below expectations, there are no major concerns about the company's overall business or its near and long-term momentum. The energy drink category, in particular, is seen as highly promising, especially given the absence of private label competition.

Anticipating a promising future, the analysts project a robust 10-11% three-year revenue compound annual growth rate (CAGR). Additionally, there are expectations of a gross margin recovery, leading to an estimated 22-23% three-year EPS CAGR.

As a result of the positive outlook, the analysts raised the estimated earnings per share for 2023 from $1.51 to $1.60 and for 2024 from $1.82 to $1.90.