Since Monster Beverage Corporation ( NASDAQ:MNST ) released its earnings in December 2018, it seems that analyst expectations are fairly bearish, as a 10% rise in profits is expected in the upcoming year, compared with the higher past 5-year average growth rate of 20%. With trailing-twelve-month net income at current levels of US$993m, we should see this rise to US$1.1b in 2020. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Monster Beverage in the longer term. For those keen to understand more about other aspects of the company, you can research its fundamentals here .
Exciting times ahead?
The longer term view from the 18 analysts covering MNST is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To get an idea of the overall earnings growth trend for MNST, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
This results in an annual growth rate of 9.0% based on the most recent earnings level of US$993m to the final forecast of US$1.3b by 2022. EPS reaches $2.48 in the final year of forecast compared to the current $1.78 EPS today. Margins are currently sitting at 26%, approximately the same as previous years. With analysts forecasting revenue growth of 0.28806 and MNST's net income growth expected to roughly track that, this company may add value for shareholders over time.
Future outlook is only one aspect when you're building an investment case for a stock. For Monster Beverage, there are three relevant aspects you should further research:
- 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.
- Valuation : What is Monster Beverage 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 Monster Beverage is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Monster Beverage? 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 firstname.lastname@example.org . 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.