Taking the lead: Monster Beverage Corporation (MNST)

Monster Beverage Corporation (NASDAQ: MNST) stock fell -0.31% on Friday to $86.77 against a previous-day closing price of $87.04. With 1.94 million shares changed hands, the volume of the stock remained lighter than its average volume of 2.61 million shares. During the session, the Beverages – Non-Alcoholic company that operates in wider Consumer Defensive sector, reached to the highest price of $87.50 whereas the lowest price it dropped to was $86.67. The 52-week range on MNST shows that it touched its highest point at $99.81 and its lowest point at $71.78 during that stretch. It currently has a 1-year price target of $101.06. Beta for the stock currently stands at 0.95.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of MNST was down-trending over the past week, with a drop of -0.69%, but this was down by -3.76% over a month. Three-month performance dropped to -5.87% while six-month performance rose 11.17%. The stock lost -6.27% in the past year, while it has lost -9.65% so far this year. A look at the trailing 12-month EPS for MNST yields 2.29 with Next year EPS estimates of 3.06. For the next quarter, that number is 0.61. This implies an EPS growth rate of -2.40% for this year and 28.98% for next year. EPS is expected to grow by 14.65% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 16.70%.

Float and Shares Shorts:

At present, 528.62 million MNST shares are outstanding with a float of 373.73 million shares on hand for trading. On Jul 14, 2022, short shares totaled 7.45 million, which was 1.41% higher than short shares on Jun 14, 2022. In addition to Mr. Rodney Cyril Sacks H.Dip.Law, H.Dip.Tax as the firm’s Co-CEO & Chairman, Mr. Hilton H. Schlosberg serves as its Co-CEO & Vice Chairman.

Institutional Ownership:

Through their ownership of 65.31% of MNST’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 43.57% of MNST, in contrast to 26.31% held by mutual funds. Shares owned by individuals account for 10.48%. As the largest shareholder in MNST with 5.48% of the stake, The Vanguard Group, Inc. holds 28,849,696 shares worth 28,849,696. A second-largest stockholder of MNST, Fidelity Management & Research Co, holds 24,810,454 shares, controlling over 4.71% of the firm’s shares. AllianceBernstein LP is the third largest shareholder in MNST, holding 17,135,892 shares or 3.25% stake. With a 2.69% stake in MNST, the Manulife Balanced Income Private is the largest stakeholder. A total of 14,177,000 shares are owned by the mutual fund manager. The Vanguard Total Stock Market Index, which owns about 2.08% of MNST stock, is the second-largest Mutual Fund holder. It holds 10,974,433 shares valued at 974.86 million. Vanguard 500 Index Fund holds 1.59% of the stake in MNST, owning 8,392,820 shares worth 745.53 million.

An Overview of Recent Financials:

Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. In its fiscal quarter reported on Mar 30, 2022, MNST reported revenue of $1.66B and operating income of $372.95M. Over the past year, revenue came in at $6.01B while operating income stood at $1.63B. It generated $273.36M net income for the quarter, which came to $1.23B over the last twelve months. The EBITDA in the recently reported quarter was $388.78M and diluted EPS was $0.51. EBITDA for the full year was $1.68B.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for MNST since 23 analysts follow the stock currently. There are 11 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 10 believe that the stock is worth HOLDING, 1 give it an OVERWEIGHT rating, and 1 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With MNST analysts setting a high price target of $111.00 and a low target of $88.00, the average target price over the next 12 months is $100.79. Based on these targets, MNST could surge 27.92% to reach the target high and rise by 1.42% to reach the target low. Reaching the average price target will result in a growth of 16.16% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. MNST will report FY 2022 earnings on 03/01/2023. Analysts have provided yearly estimates in a range of $2.80 being high and $2.20 being low. For MNST, this leads to a yearly average estimate of $2.33. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Monster Beverage Corporation surprised analysts by -$0.19 when it reported $0.51 EPS against a consensus estimate of $0.70. The surprise factor in the prior quarter was -$0.06. Based on analyst estimates, the high estimate for the next quarter is $0.69 and the low estimate is $0.53. The average estimate for the next quarter is thus $0.61.

Summary of Insider Activity:

Insiders traded MNST stock several times over the past three months with 0 Buys and 0 Sells. In these transactions, 0 shares were bought while 0 shares were sold. The number of buy transactions has increased to 23 while that of sell transactions has risen to 9 over the past year. The total number of shares bought during that period was 111,202 while 191,795 shares were sold.

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