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Monster Beverage stock analysis MNST.
Monster has higher valuation ratios than Anheuser-Busch InBev, Heineken, and even PepsiCo and The Coca-Cola Company.
The current FCF yield (FCF / EV) is 1.3%. Of course, this is distorted as the last year’s performance was much lower than the years before. However, even if we take a year when the margins were much higher and imply 2x higher FCF, it still doesn’t justify the current valuation.
Based on the analysts’ estimates, the growth ahead is expected to be slightly above 10% per year, implying that the growth isn’t expected to slow down.
The business itself is great, and the management has done outstanding job, but there is no way to justify the current market cap. The investors seem to continue seeing Monster as a defensive company that will continue to do well in good and bad times, but that might not be completely true, especially based on the performance during 2022.
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