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Category: Stock Market and Monster Beverage Corp (MNST)
Date: 9 November 2020 Stock Price of Monster Beverage Corp: $83.26 We take a look at the 3rd quarter earnings release of their 2020 fiscal year of Monster Beverage Corporation, the owner of popular energy drinks such as Monster Energy and Muscle Monster. The group reported revenues of $1.246 billion and net income of $347.6 million for the quarter.
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About Monster Beverage Corporation
Based in Corona, California, Monster Beverage Corporation is a holding company and conducts no operating business except through its consolidated subsidiaries. The Company’s subsidiaries develop and market energy drinks, including Monster Energy® energy drinks, Monster Energy Ultra® energy drinks, Monster MAXX® maximum strength energy drinks, Java Monster® non-carbonated coffee + energy drinks, Espresso Monster® non-carbonated espresso + energy drinks, Caffé Monster® non-carbonated energy coffee drinks, Monster Rehab® non-carbonated energy drinks, Muscle Monster® energy shakes, Monster Hydro® energy drinks, Reign Total Body Fuel™ high performance energy drinks, NOS® energy drinks, Full Throttle® energy drinks, Burn® energy drinks, Samurai® energy drinks, Relentless® energy drinks, Mother® energy drinks, Power Play® energy drinks, BU® energy drinks, Nalu® energy drinks, BPM® energy drinks, Gladiator® energy drinks, Ultra Energy® energy drinks and Predator® energy drinks.
Overview of Monster Beverage Corp's 3rd quarter 2020 earnings report
The data below refers to the most recent quarter unless specified otherwise
- Net sales: $1.246 billion (up from $1.133 billion from the same quarter of the previous year)
- Net sales increased by 9.9% over the last 12 months
- Cost of sales: $509.831 million (up from $460.575 million for the same quarter of the previous year)
- Cost of sales increased by 10.6% over the last 12 months
- Net income: $347.654 million (up from $298.923 million for the same quarter of the previous year)
- Diluted earnings per share: $0.65 (up from $0.55 for the same quarter of the previous year)
- PE ratio of Monster Beverage Corporation: 35.7
- Diluted weighted-average shares outstanding: 533.2 million (down from 548.4 million for the same quarter of the previous year)
- Cash and cash equivalents: $1.074 billion
- Cash and cash equivalents per share: $2.01
- Cash and cash equivalents makes up 2.4% of Monster Beverage Corp's market capital
- Cash and cash equivalents makes up 18.8% of Monster Beverage Corp's total assets
- Goodwill in Monster Beverage Corp: $1.331 billion
- Goodwill per share: $2.49
- Goodwill makes up 23.4% of Monster Beverage Corp's total assets
- Stockholders equity in Monster Beverage Corporation: $4.629 billion
- Stockholders equity per share in Monster Beverage Corp: $8.68
- Monster Beverage Corporation is trading at 9.6 times its stockholders equity per share which is well outside the expected range of between 2 and 4 times that most firms tend to trade at.
- For some perspective the average price to book value of firms in the S&P 500 is 3.8
Monster's management commentary on their 3rd quarter 2020 earnings and guidance
CORONA, Calif., Nov. 05, 2020 (GLOBE NEWSWIRE) -- Monster Beverage Corporation (NASDAQ: MNST) today reported financial results for the three- and nine-months ended September 30, 2020.
COVID-19 Pandemic
The Company’s top priority continues to be the health, safety and well-being of its employees. Early in March 2020, the Company implemented global travel restrictions and work-from-home policies for employees who are able to work remotely. For those employees who are unable to work remotely, safety precautions have been instituted, which were developed and adopted in line with guidance from public health authorities and professional consultants. The Company’s flavor manufacturing facilities, its co-packers, warehouses and shipment facilities, are all operating. Certain of the Company’s bottlers/distributors have implemented modifications to their call points and service levels, but the Company’s products remain generally available to consumers. In limited countries the operations of its bottlers/distributors have been more affected.
COVID-19 Pandemic
The Company’s top priority continues to be the health, safety and well-being of its employees. Early in March 2020, the Company implemented global travel restrictions and work-from-home policies for employees who are able to work remotely. For those employees who are unable to work remotely, safety precautions have been instituted, which were developed and adopted in line with guidance from public health authorities and professional consultants. The Company’s flavor manufacturing facilities, its co-packers, warehouses and shipment facilities, are all operating. Certain of the Company’s bottlers/distributors have implemented modifications to their call points and service levels, but the Company’s products remain generally available to consumers. In limited countries the operations of its bottlers/distributors have been more affected.
Despite the ongoing impact of the COVID-19 pandemic, the Company achieved record third quarter net sales and the highest quarterly net sales in the Company’s history. While our performance in EMEA was solid in the third quarter, EMEA remained adversely affected by the COVID-19 pandemic. Since mid-March 2020, the Company has seen a shift in consumer channel preferences and package configurations, including an increase in at-home consumption and a decrease in food service on-premise consumption. The Company’s sales in the 2020 second quarter were initially adversely affected as a result of a decrease in foot traffic in the convenience and gas channel (which is the Company’s largest channel) but improved sequentially from the latter half of the 2020 second quarter and throughout the 2020 third quarter. The Company’s e-commerce, club store, mass merchandiser and grocery and related business continued to increase in the quarter, while its food service on-premise business, which is a small channel for the Company, remained challenged.
Currently, the Company does not foresee a material impact on the ability of its co-packers to manufacture and its bottlers/distributors to distribute its products as a result of the COVID-19 pandemic. In addition, the Company is not experiencing significant raw material or finished product shortages, and its supply chain remains intact. The Company is continually addressing its aluminum can requirements given the Company’s volume growth and the current supply constraints in the aluminum can industry.
As of September 30, 2020, the Company had $1.07 billion in cash and cash equivalents, $599.3 million in short-term investments and $20.6 million in long-term investments. Based on currently available information, the Company does not expect the COVID-19 pandemic to have a material impact on its liquidity
Rodney C. Sacks, Chairman and Chief Executive Officer, said: “The Company performed well in the third quarter, achieving record quarterly net sales, despite the ongoing impact of the COVID-19 pandemic in most of our markets. In particular, net sales in EMEA, for both the Monster Energy® and the Strategic Brands segments, improved sequentially in the third quarter, although the COVID-19 pandemic continued to negatively impact this region. Our supply chain remains intact and we are continuing to service our customers.
“According to Nielsen, the energy drink category continues to grow in most of our markets, including the United States. “We launched a number of new Monster Energy® brand energy drinks, Reign Total Body Fuel® high performance energy drinks and our affordable energy brands in various domestic and international markets in the third quarter, as well as in early October 2020.
“The COVID-19 pandemic remains a heightened threat with a number of countries, particularly in EMEA, reinstituting lockdowns and other restrictions.
“Our thoughts and prayers remain with all who have been impacted by the COVID-19 pandemic and we wish them all a speedy recovery,” Sacks added.
Share Repurchase Program
No shares of the Company’s common stock were repurchased during the 2020 third quarter. As of November 5, 2020, approximately $441.5 million remained available for repurchase under the previously authorized repurchase program.
Currently, the Company does not foresee a material impact on the ability of its co-packers to manufacture and its bottlers/distributors to distribute its products as a result of the COVID-19 pandemic. In addition, the Company is not experiencing significant raw material or finished product shortages, and its supply chain remains intact. The Company is continually addressing its aluminum can requirements given the Company’s volume growth and the current supply constraints in the aluminum can industry.
As of September 30, 2020, the Company had $1.07 billion in cash and cash equivalents, $599.3 million in short-term investments and $20.6 million in long-term investments. Based on currently available information, the Company does not expect the COVID-19 pandemic to have a material impact on its liquidity
Rodney C. Sacks, Chairman and Chief Executive Officer, said: “The Company performed well in the third quarter, achieving record quarterly net sales, despite the ongoing impact of the COVID-19 pandemic in most of our markets. In particular, net sales in EMEA, for both the Monster Energy® and the Strategic Brands segments, improved sequentially in the third quarter, although the COVID-19 pandemic continued to negatively impact this region. Our supply chain remains intact and we are continuing to service our customers.
“According to Nielsen, the energy drink category continues to grow in most of our markets, including the United States. “We launched a number of new Monster Energy® brand energy drinks, Reign Total Body Fuel® high performance energy drinks and our affordable energy brands in various domestic and international markets in the third quarter, as well as in early October 2020.
“The COVID-19 pandemic remains a heightened threat with a number of countries, particularly in EMEA, reinstituting lockdowns and other restrictions.
“Our thoughts and prayers remain with all who have been impacted by the COVID-19 pandemic and we wish them all a speedy recovery,” Sacks added.
Share Repurchase Program
No shares of the Company’s common stock were repurchased during the 2020 third quarter. As of November 5, 2020, approximately $441.5 million remained available for repurchase under the previously authorized repurchase program.
Monster Beverage Corporation (MNST) stock price history over last 5 years
The image below, obtained from Google, shows the stock price history of Monster Beverage Corporation (NASDAQ: MNST) over the last 5 years. And it's been a pretty decent time for Monster Beverage Corporation stockholders. 5 years ago the stock of Monster was trading at around $49 a stock and its currently trading at $83.26. That's a pretty healthy return of 69.9% provided to Monster Beverage Corporation stockholders over the last 5 years.
Monster Beverage Corporation stock is trading at close to their 52 week high and far away from its 52 week low which shows the short term sentiment and momentum of Monster's stock is positive at this point in time.
Monster Beverage Corporation stock is trading at close to their 52 week high and far away from its 52 week low which shows the short term sentiment and momentum of Monster's stock is positive at this point in time.
Monster Beverage Corporation (MNST) vs Coca-Cola (KO) stock performance over last 5 years
The image below shows the stock price history of Monster Beverage Corporation (MNST) and Coca-Cola (KO) over the last 5 years. Both are active in the non-alcoholic beverage and energy drinks market.
- Monster Beverages Corp (MNST): 69.9%
- Coca-Cola (KO): 16.5%
Recent coverage of Monster Beverage Corporation
The extract below shows recent coverage of Monster Beverage Corp as obtained from SeekingAlpha.com
Monster Beverage (MNST) came out with quarterly earnings of $0.65 per share, beating the Zacks Consensus Estimate of $0.63 per share. This compares to earnings of $0.55 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 3.17%. A quarter ago, it was expected that this energy drink maker would post earnings of $0.48 per share when it actually produced earnings of $0.59, delivering a surprise of 22.92%.
Over the last four quarters, the company has surpassed consensus EPS estimates four times.
Monster Beverage, which belongs to the Zacks Beverages - Soft drinks industry, posted revenues of $1.25 billion for the quarter ended September 2020, surpassing the Zacks Consensus Estimate by 0.56%. This compares to year-ago revenues of $1.13 billion. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Monster Beverage shares have added about 30.2% since the beginning of the year versus the S&P 500's gain of 6.6%.
Read the full article here
Monster Beverage (MNST) came out with quarterly earnings of $0.65 per share, beating the Zacks Consensus Estimate of $0.63 per share. This compares to earnings of $0.55 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 3.17%. A quarter ago, it was expected that this energy drink maker would post earnings of $0.48 per share when it actually produced earnings of $0.59, delivering a surprise of 22.92%.
Over the last four quarters, the company has surpassed consensus EPS estimates four times.
Monster Beverage, which belongs to the Zacks Beverages - Soft drinks industry, posted revenues of $1.25 billion for the quarter ended September 2020, surpassing the Zacks Consensus Estimate by 0.56%. This compares to year-ago revenues of $1.13 billion. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Monster Beverage shares have added about 30.2% since the beginning of the year versus the S&P 500's gain of 6.6%.
Read the full article here
Monster Beverage Corporation (MNST) latest stock valuation
So based on Monster Beverage Corporation's latest earnings report what do we value Monster stock at? Based on their earnings reported our valuation model provides a target price (full value price) for Monster Beverage Corporation at $51.10 per stock
We therefore believe that the stock of Monster Beverage Corporation stock is overvalued. We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target price, which in this case is $51.10. A good entry price into Monster Beverage Corporation would therefore be at $46 or below.
We expect the stock of Monster Beverage Corporation to pull back from current levels to levels closer to our target price in coming weeks and months as we do believe the group's stock is overvalued.
Since the stock of Monster Beverage Corp is trading at well above our suggested entry point we rate the stock of Monster Beverage Corp as a sell
We therefore believe that the stock of Monster Beverage Corporation stock is overvalued. We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target price, which in this case is $51.10. A good entry price into Monster Beverage Corporation would therefore be at $46 or below.
We expect the stock of Monster Beverage Corporation to pull back from current levels to levels closer to our target price in coming weeks and months as we do believe the group's stock is overvalued.
Since the stock of Monster Beverage Corp is trading at well above our suggested entry point we rate the stock of Monster Beverage Corp as a sell
Next earnings release of Monster Beverage Corporation
It is expected that Monster Beverage Corporation will release their 4th quarter and full fiscal 2020 results in early February 2021