As you might know, Monster Beverage Corporation (NASDAQ:MNST) just kicked off its latest quarterly results with some very strong numbers. The company beat expectations with revenues of US$1.2b arriving 2.4% ahead of forecasts. Statutory earnings per share (EPS) were US$0.65, 4.1% ahead of estimates. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there’s been a strong change in the company’s prospects, or if it’s business as usual. With this in mind, we’ve gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Following the latest results, Monster Beverage’s 15 analysts are now forecasting revenues of US$5.04b in 2021. This would be a meaningful 14% improvement in sales compared to the last 12 months. Per-share earnings are expected to step up 14% to US$2.56. In the lead-up to this report, the analysts had been modelling revenues of US$4.97b and earnings per share (EPS) of US$2.52 in 2021. So it’s pretty clear that, although the analysts have updated their estimates, there’s been no major change in expectations for the business following the latest results.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$89.29. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Monster Beverage at US$98.00 per share, while the most bearish prices it at US$62.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Monster Beverage’s growth to accelerate, with the forecast 14% growth ranking favourably alongside historical growth of 10% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 6.6% per year. Factoring in the forecast acceleration in revenue, it’s pretty clear that Monster Beverage is expected to grow much faster than its industry.
The Bottom Line
The most obvious conclusion is that there’s been no major change in the business’ prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations – and our data suggests that revenues are expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year’s earnings. We have forecasts for Monster Beverage going out to 2024, and you can see them free on our platform here.
You still need to take note of risks, for example – Monster Beverage has 1 warning sign we think you should be aware of.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.