Monster Beverage Stock Is Esti
Monster Beverage stock (NAS: MNST, 30 year financials) gives all indications of a fair valuation, according to the GuruFocus value calculation. The GuruFocus Value is GuruFocus’s estimate of the fair value at which the stock is to trade. It is calculated based on the historical multiples at which the stock has traded, the company’s past growth, and analysts’ estimates of the company’s future performance. If a stock’s price is significantly above the GF value line, it is overvalued and its future performance is likely to be poor. On the other hand, if it is significantly below the GF value line, its future return is likely to be higher. At its current price of $ 91.76 per share and market cap of $ 48.5 billion, Monster Beverage stock gives every indication of fair value. The GF value for Monster Beverage is shown in the table below.
Given that Monster Beverage is valued at its fair value, the long-term return on its shares is expected to be close to the growth rate of its business, which has averaged 13.8% over the past three years and is expected to grow. by 11.47% per year over the next three years. five years.
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Companies with poor financial strength present investors with a high risk of permanent capital loss. To avoid a permanent loss of capital, an investor should do his research and consider the financial strength of a company before deciding to buy stocks. Both cash-to-debt ratio and covering a company’s interests are a great way to understand its financial strength. Monster Beverage has a cash-to-debt ratio of 1,000.00, which ranks better than 99% of companies in the non-alcoholic beverage industry. The overall financial strength of Monster Beverage is 9 out of 10, indicating that the financial strength of Monster Beverage is strong. Here is Monster Beverage’s debt and cash flow over the past few years:
Companies that have historically been profitable over the long term pose less risk to investors who want to buy stocks. Higher profit margins usually dictate a better investment compared to a business with lower profit margins. Monster Beverage has been profitable 10 in the past 10 years. In the past twelve months, the company reported sales of $ 4.8 billion and earnings of $ 2.71 per share. His the operating margin is 35.19%, which ranks better than 98% of companies in the Beverage – Non-Alcoholic industry. Overall, Monster Beverage’s profitability is ranked 10 out of 10, indicating strong profitability. Here is Monster Beverage’s sales and net income for the past few years:
Growth is probably one of the most important factors in the valuation of a business. GuruFocus research has shown that growth is closely tied to the long-term performance of a company’s stocks. If a company’s business is growing, the business typically creates value for its shareholders, especially if the growth is profitable. Likewise, if a business’s income and profits decline, the value of the business will decline. Monster Beverage’s 3-year average revenue growth rate is over 83% for companies in the soft drink industry. Monster Beverage’s 3-year average EBITDA growth rate is 13.6%, which ranks better than 71% of companies in the non-alcoholic beverage industry.
Another method of determining a company’s profitability is to compare its return on invested capital to the weighted average cost of capital. Return on invested capital (ROIC) The extent to which a business generates cash flow relative to the capital it has invested in its business. The weighted average cost of capital (WACC) is the rate that a company should pay, on average, to all of its security holders to finance its assets. When the ROIC is higher than the WACC, it implies that the company creates value for the shareholders. Over the past 12 months, Monster Beverage’s return on invested capital is 40.01 and its cost of capital is 8.24. Monster Beverage’s historic ROIC vs WACC comparison is shown below:
In conclusion, the action of Monster Beverage (NAS: MNST, 30-year Financials) gives all indications of a fair valuation. The company’s financial position is strong and its profitability is solid. Its growth ranks better than 71% of companies in the Non-Alcoholic Beverage industry. To learn more about the Monster Beverage stock, you can view its 30-year financial data here.
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