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What Are Analysts Saying About Monster Beverage Corporation's (NASDAQ:MNST) Future?

Simply Wall St

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In December 2018, Monster Beverage Corporation (NASDAQ:MNST) released its most recent earnings announcement, which suggested that the business gained from a robust tailwind, leading to a double-digit earnings growth of 21%. Below, I've laid out key growth figures on how market analysts view Monster Beverage's earnings growth outlook over the next couple of years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.

View our latest analysis for Monster Beverage

Market analysts' consensus outlook for next year seems positive, with earnings rising by a robust 11%. This growth seems to continue into the following year with rates reaching double digit 22% compared to today’s earnings, and finally hitting US$1.3b by 2022.

NasdaqGS:MNST Past and Future Earnings, April 1st 2019

Even though it is informative knowing the growth rate each year relative to today’s level, it may be more beneficial to evaluate the rate at which the business is rising or falling on average every year. The pro of this method is that it removes the impact of near term flucuations and accounts for the overarching direction of Monster Beverage's earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I put a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 9.1%. This means, we can expect Monster Beverage will grow its earnings by 9.1% every year for the next couple of years.

Next Steps:

For Monster Beverage, I've compiled three key factors you should further research:

  1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
  2. Valuation: What is MNST worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether MNST is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of MNST? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.