MNST Monster Beverage
Growth re-accelerated, but at 28x earnings the energy-drink king still prices in more than it delivers.
The story
Monster is the global energy-drink category leader, with a capital-light model in which Coca-Cola's bottling network handles distribution. It still has an international runway in Latin America, EMEA and Asia. The company is in late growth, heading toward maturity: brand strength and pricing power support premium margins, but the core US category is maturing and competition from Celsius, Red Bull and Alani Nu caps how far margins can expand.
I raised Y1 growth from 8% to 10% (a 25% relative move) because TTM revenue of $9.22B is about 11% above FY $8.29B, so international expansion and pricing are running ahead of my prior case. I nudged the target margin from 28% to 29% because TTM is 29.7% after pricing and input-cost relief, but kept it below the peak given competitive promo pressure; all other drivers are unchanged because the facts behind them have not moved.
Value drivers
| Revenue growth (Y1) | 10.0% |
| Terminal growth | 3.5% |
| Forecast horizon | 8y |
| Target operating margin | 29.0% |
| Years to target margin | 5 |
| Sales-to-capital | 1.50 |
| Beta | 0.75 |
| Failure probability | 2.0% |
| Cost of capital (WACC) | 8.6% |
| Terminal WACC | 9.7% |
Valuation bridge
| PV of explicit FCFF | 12.97B |
| PV of terminal value | 23.03B |
| Equity value | 36.95B |
| ÷ shares → per share | $18.86 |
News
bearish -0.20 · 8 articles
- Monster Beverage Is Lagging the S&P 500 in 2026. Here's Where the Stock Could Trade by September 2027.
- KO vs. MNST: Which Beverage Stock Has the Stronger Growth Story?
- Kraft Heinz vs. Monster Beverage: Which Consumer Goods Stock Is a Better Buy in 2026?
- How Low Can Dutch Bros Stock Go?
- Monster Beverage Is Already Huge. Can It Keep Growing?
- Coca-Cola Hired Monster’s Americas CEO to Run North America. Here’s Where the Stock Could Go
- Monster exec returns to Coca-Cola as North America president
- 1 Profitable Stock to Own for Decades and 2 We Brush Off
Projected free cash flow to the firm
| Yr | Revenue | Growth | Margin | NOPAT | Reinvest | FCFF | PV |
|---|---|---|---|---|---|---|---|
| 1 | 10.14B | 10.0% | 29.6% | 2.30B | 614.60M | 1.69B | 1.55B |
| 2 | 11.06B | 9.1% | 29.4% | 2.50B | 613.28M | 1.88B | 1.60B |
| 3 | 11.96B | 8.1% | 29.3% | 2.69B | 600.44M | 2.09B | 1.63B |
| 4 | 12.82B | 7.2% | 29.1% | 2.87B | 575.29M | 2.29B | 1.65B |
| 5 | 13.63B | 6.3% | 29.0% | 3.03B | 537.40M | 2.50B | 1.65B |
| 6 | 14.36B | 5.4% | 29.0% | 3.20B | 486.80M | 2.71B | 1.65B |
| 7 | 15.00B | 4.4% | 29.0% | 3.34B | 423.98M | 2.91B | 1.63B |
| 8 | 15.52B | 3.5% | 29.0% | 3.45B | 349.92M | 3.10B | 1.60B |
Key risks
- US energy-drink category saturation and share loss to Celsius and Alani Nu
- Regulatory or health scrutiny of caffeine and sugar, especially in international markets
- Aluminum and input-cost inflation compressing gross margin
Catalysts
- International growth (China, India, Africa) sustaining double-digit total growth
- Buybacks funded by the $1.7B net cash balance and strong free cash flow