Value
2.7/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.6 |
| P/S | 2.9 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 2.9 |
| PEG | 3.8 |
| Analyst target | 3.0 |
- ▸Forward P/E: 37.7x
- ▸PEG: 2.83
- ▸Expensive valuation
MNST · Why this verdict
Why Monster Beverage (MNST) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score6.1/10
ConfidenceMEDIUM
MacroNEUTRAL
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. | →Stable |
| 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. | →Stable |
| 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.
→StableBear 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.
→StableTargets
- 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.
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.
Per-dimension breakdown
Quality
8.7/10data 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 | 7.5 |
| Piotroski F | 8.9 |
- ▸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
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.4 |
| MACD | 9.3 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 2.9 |
- ▸Overbought (RSI 72)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.8 |
| Analyst rating | 5.0 |
| Price target | 3.8 |
Insider
5.2/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.3 |
- ▸Insider selling (low materiality) — $15,457,562 (0.016% of mkt cap)
Peer rank
5.7/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 1.3 |
| quality rank | 7.3 |
| growth rank | 7.7 |
- ▸Best-in-class margins
Technical
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.2 |
| support resistance | 1.2 |
| 52w position | 9.7 |
Risk (lower is worse)
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.4 |
| days to cover | 6.6 |
| volatility | 7.7 |
| put call | 3.7 |
| implied vol | 6.7 |
| beta | 9.8 |
| debt equity | 4.8 |
- ▸Concentration risks: 1 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 4.9 |
| news activity | 8.0 |
- ▸Strong earnings: 3B/1M
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (6)
- MOMENTUM:7.1>=5.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:34d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-1.7=NEGATIVE
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-1.74
Upside
-17.3%
Downside
9.9%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:7.1>=5.5. Top dim: Quality at 8.7; weakest: Value at 2.7. No conviction either direction.
The strongest dimensions are Quality at 8.7, Growth at 8.5, and Momentum at 7.1; the weakest are Value at 2.7, Technical at 4.0, and Sentiment at 4.9. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -1.74 and an engine sizing output of AVOID.
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.