Value
2.9/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.7 |
| P/S | 3.2 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 3.0 |
| PEG | 3.8 |
| Analyst target | 4.0 |
- ▸Forward P/E: 36.0x
- ▸PEG: 2.75
- ▸Expensive valuation
MNST · Why this verdict
Why Monster Beverage (MNST) is rated BUY WAIT
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. The TrendMatrix editorial team frequently holds personal long-term positions in securities discussed. We disclose positions held at the time of publication on each piece. We maintain a trading-window policy: we do not initiate or close positions in the same direction as a TrendMatrix publication within 24 hours before or 72 hours after publication.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security. Our sole compensation is subscription revenue.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
VerdictBUY WAIT
Overall score6.5/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Monster Beverage has delivered 4 consecutive earnings beats and earns best-in-class margins with a return on equity of 27%, but the stock trades at a rich forward price-to-earnings of 36x, is above its analyst price target, and concentration in a single major distribution partner represents an unpriced structural risk.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Monster Beverage earns a net margin of 23%, a return on equity of 27%, and scores as a wide economic moat compounder with an operating margin in the top tier of its peer group, indicating durable pricing power and efficient capital deployment. Quality breakdown | Operating margin remains above 20% and return on equity stays above 20% over the next 4 quarters, confirming structural profitability and moat durability. | →Stable |
| CounterA forward price-to-earnings of 36x already prices in these premium margins, leaving limited upside if margin improvement stalls or input cost pressures emerge. | ||
The company has beaten earnings estimates in all 4 of the last 4 quarters with an average positive surprise of 7.6%, demonstrating reliable execution and a management team that consistently sets achievable guidance. Earnings | The earnings beat streak extends to 6 consecutive quarters with each quarter's actual result exceeding the consensus estimate by at least 3%. | →Stable |
| CounterAverage surprise of 7.6% is modest relative to higher-growth peers, and the stock already trades above analyst targets, meaning beats may not translate into price appreciation. | ||
A single high-severity concentration risk in the major distribution counterparty has been flagged in the company's annual filing, meaning a disruption to this relationship could materially impair revenue and distribution reach. Bear case | No disruption or renegotiation of the primary distribution partnership is announced over the next 12 months, maintaining current revenue distribution infrastructure. | ↓Deteriorating |
| CounterThe distribution relationship has historically been stable, and concentration with a major beverage group may represent strategic alignment rather than an unmitigated risk. | ||
The current price of $93.23 exceeds the analyst consensus take-profit target of $91.43, the asymmetry is negative, and the stock sits within 0.1% of its 52-week high, suggesting the near-term reward-to-risk ratio is unfavorable at current levels. Targets | The stock price pulls back below $88 over the next 3 months, creating a more attractive entry point with at least 5% upside to the analyst target. | ↑Improving |
| CounterStocks trading near 52-week highs with strong fundamentals often continue to outperform, and the quality of the business may justify a premium above analyst consensus targets. | ||
Monster Beverage earns a net margin of 23%, a return on equity of 27%, and scores as a wide economic moat compounder with an operating margin in the top tier of its peer group, indicating durable pricing power and efficient capital deployment.
→StableQuality breakdown
- Expectation
- Operating margin remains above 20% and return on equity stays above 20% over the next 4 quarters, confirming structural profitability and moat durability.
CounterA forward price-to-earnings of 36x already prices in these premium margins, leaving limited upside if margin improvement stalls or input cost pressures emerge.
The company has beaten earnings estimates in all 4 of the last 4 quarters with an average positive surprise of 7.6%, demonstrating reliable execution and a management team that consistently sets achievable guidance.
→StableEarnings
- Expectation
- The earnings beat streak extends to 6 consecutive quarters with each quarter's actual result exceeding the consensus estimate by at least 3%.
CounterAverage surprise of 7.6% is modest relative to higher-growth peers, and the stock already trades above analyst targets, meaning beats may not translate into price appreciation.
A single high-severity concentration risk in the major distribution counterparty has been flagged in the company's annual filing, meaning a disruption to this relationship could materially impair revenue and distribution reach.
↓DeterioratingBear case
- Expectation
- No disruption or renegotiation of the primary distribution partnership is announced over the next 12 months, maintaining current revenue distribution infrastructure.
CounterThe distribution relationship has historically been stable, and concentration with a major beverage group may represent strategic alignment rather than an unmitigated risk.
The current price of $93.23 exceeds the analyst consensus take-profit target of $91.43, the asymmetry is negative, and the stock sits within 0.1% of its 52-week high, suggesting the near-term reward-to-risk ratio is unfavorable at current levels.
↑ImprovingTargets
- Expectation
- The stock price pulls back below $88 over the next 3 months, creating a more attractive entry point with at least 5% upside to the analyst target.
CounterStocks trading near 52-week highs with strong fundamentals often continue to outperform, and the quality of the business may justify a premium above analyst consensus targets.
Per-dimension breakdown
Quality
9.0/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 8.9 |
| ROA | 10.0 |
| Gross margin | 7.1 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 9.7 |
| FCF quality | 6.1 |
| Moat | 9.0 |
| Piotroski F | 10.0 |
- ▸Excellent ROE: 27%
- ▸Strong margins: 23%
- ▸Wide economic moat
- ▸Compounder quality: strong returns + growth
Growth
8.5/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 9.2 |
| EPS growth | 7.8 |
- ▸Strong growth: 27% YoY
Momentum
3.6/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 7.6 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 6.0 |
| Volume | 3.2 |
- ▸Uptrend pullback (RSI 39) - buy opportunity
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.1 |
| Analyst rating | 7.5 |
| Price target | 5.4 |
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Insider selling (low materiality) — $15,457,562 (0.017% of mkt cap)
- ▸Institutions accumulating
Peer rank
6.2/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 0.8 |
| quality rank | 6.9 |
| growth rank | 7.7 |
- ▸Best-in-class margins
- ▸Conservative debt levels
Technical
9.3/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 9.9 |
| support resistance | 9.3 |
| 52w position | 8.6 |
Risk (lower is worse)
7.7/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.7 |
| days to cover | 7.6 |
| volatility | 6.9 |
| put call | 8.3 |
| implied vol | 6.2 |
| max pain risk | 7.0 |
| beta | 9.8 |
| debt equity | 10.0 |
| news risk | 5.0 |
- ▸Concentration risks: 1 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 5.7 |
| news activity | 8.0 |
- ▸Strong earnings: 3B/1M
- ▸Earnings in 11 days
How the verdict was assembled
Engine trigger
Wide-moat business. Accumulate on weakness.
Engine technical detail
verdict_path:
L4:PATH_E_WIDE_MOAT|ENTRY_STICKY:PRIOR_STILL_VIABLEPassed (4)
- INSIDER:OK
- NEWS_BOOST:ANALYST_CLUSTER(5)
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:3.6<4.5
- ASYMMETRY:-1.6=NEGATIVE
Warning (2)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
- EARNINGS_PROXIMITY:11d<=14d (soft)
Reward-to-Risk
-1.58
Upside
-7.9%
Downside
5.0%
Sizing output
STARTER
Setup— — No clear chart pattern; technical signals are mixed
EdgeTemporary headwind — High quality (9.0) with weak momentum (3.6)
SuitabilityModerate — Balanced profile
Investment implication
The STRONG_BUY_WAIT verdict reflects the MOMENTUM gate's 3.6<4.5 outcome against Technical at 9.3 and asymmetric R:R of -1.58.
The strongest dimensions are Technical at 9.3, Quality at 9.0, and Growth at 8.5; the weakest are Value at 2.9, Momentum at 3.6, and Catalyst at 6.1. The V9 engine flagged 2 failed gates with 2 warnings, producing an asymmetric reward-to-risk of -1.58 and an engine sizing output of STARTER.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Premium Margins Moat
Trip ifOperating margin falls below 18% or return on equity declines below 20% for 2 consecutive quarters.
- P2Earnings Beat Consistency
Trip ifEarnings miss by more than 5% in any 1 of the next 2 quarters, breaking the 4-quarter beat streak.
- P3Distribution Partner Concentration
Trip ifA material adverse announcement regarding the primary distribution partner reduces coverage by more than 10% of distribution points.
- P4Valuation Target Overshoot
Trip ifThe stock price rises above $100 without an upward revision to the analyst consensus target, extending the overvaluation by more than 10% above the take-profit level.