Morningstar Rating

Stock Research and Analysis

by Adam Fleck, CFA

Bulls Say

Monster’s energy drink end market has enjoyed outsized growth versus traditional sodas and other beverages and should continue to see above-average gains from further penetration.
The energy drink market is largely an oligopoly, with Red Bull, Monster, and Rockstar together controlling more than 85% of global volume, and Monster's acquisition of Coke's energy brands will further narrow the number of competitors.
Monster is able to price its products substantially higher than other carbonated beverages, owing to the perceived value consumers place on energy drinks. Read more 

Bears Say

Monster’s international expansion to date has been limited by production issues (such as availability of certain aluminum cans) and distribution challenges. As such, non-U.S. operating margins have only recently turned positive, and still sharply trail domestic profitability.
Monster still completely relies on third-party distribution, even after its partnership agreement with Coca-Cola.
The energy drink market faces substantial risks from regulatory or health-related backlash, and Monster is subject to several lawsuits that could impair results. Read more 

Management

We believe Monster exhibits Standard stewardship and corporate governance. The firm’s CEO and Chairman Rodney Sacks has led to the company since 1990, and it’s hard to argue with the firm’s success under his leadership; Monster’s stock has substantially   Read more 

Profile

Through its subsidiaries, Monster Beverage Corporation develops, markets, and sells a variety of nonalcoholic beverages, including energy drinks, natural sodas, and fruit   Read more 

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