Let's talk about the popular Monster Beverage Corporation (NASDAQ:MNST). The company's shares received a lot of attention from a substantial price movement on the NASDAQGS over the last few months, increasing to US$70.40 at one point, and dropping to the lows of US$50.97. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Monster Beverage's current trading price of US$53.66 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Monster Beverage’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
What is Monster Beverage worth?
Good news, investors! Monster Beverage is still a bargain right now. According to my valuation, the intrinsic value for the stock is $77.80, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. What’s more interesting is that, Monster Beverage’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
Can we expect growth from Monster Beverage?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Monster Beverage’s earnings over the next few years are expected to increase by 22%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? Since MNST is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on MNST for a while, now might be the time to enter the stock. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy MNST. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed investment decision.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Monster Beverage. You can find everything you need to know about Monster Beverage in the latest infographic research report. If you are no longer interested in Monster Beverage, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
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