MNST - Embedded Expectations Analysis - 2021 05 11
Monster Beverage Corporation (MNST:USA) currently trades near historical highs relative to UAFRS-based (Uniform) earnings, with a 34.0x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management may be concerned about new product launches, their ability to gain market share in Argentina, and softness in performance energy drinksSpecifically, management may lack confidence in their ability to improve overall sales during the pandemic, mitigate gross profit margin declines, and gain market share in Argentina. Furthermore, they may have concerns about the potential of their core Monster Ultra flavor launch and softness in the performance Energy category. Moreover, management may lack confidence in their ability to increase SKUs across various countries and cater to country-specific customers' appetite, and they may have concerns about competitive pressures in the alcohol category
Monster Beverage is a holding company. Through its subsidiaries, the company develops, markets, sells and distributes energy drink beverages and concentrates for energy drink beverages. The company has the following operating and reportable segments: Monster Energy? Drinks segment, which is primarily comprised of the company's Monster Energy? drinks and Reign Total Body Fuel? energy drinks; Strategic Brands segment, which is comprised primarily of the various energy drink brands from The Coca-Cola Company, as well as its energy drinks; and Other segment, which is comprised of certain prod ucts sold by American Fruits and Flavors, LLC, a wholly-owned subsidiary, to independent third-party customers.
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