NEW YORK (TheStreet) -- Shares of Monster Beverage Corp. (MNST) are down by -1.16% to $92.41 in pre-market trading on Monday, following a ratings downgrade to "hold" from "buy" at Jefferies Group (JEF) .
The firm said it reduced its rating on the alternative beverage maker based on a valuation call, following a run up on the Coca-Cola (KO) deal.
After the close on Thursday, Monster and Coke announced they entered into a long term strategic partnership, sending Monster's stock higher. On Friday shares of Monster finished with a gain of 21.84% to $93.49.
Must Read: 3D Printing Companies for Your Stock Portfolio
EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he and Stephanie Link think could be potentially HUGE winners. Click here to see the holdings for FREE
"We rate MONSTER BEVERAGE CORP (MNST) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
Separately, TheStreet Ratings team rates MONSTER BEVERAGE CORP as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
- MNST's revenue growth has slightly outpaced the industry average of 4.4%. Since the same quarter one year prior, revenues slightly increased by 8.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- MNST has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 3.03, which clearly demonstrates the ability to cover short-term cash needs.
- MONSTER BEVERAGE CORP has improved earnings per share by 30.6% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, MONSTER BEVERAGE CORP increased its bottom line by earning $1.96 versus $1.86 in the prior year. This year, the market expects an improvement in earnings ($2.59 versus $1.96).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Beverages industry. The net income increased by 31.9% when compared to the same quarter one year prior, rising from $106.87 million to $141.00 million.
- The gross profit margin for MONSTER BEVERAGE CORP is rather high; currently it is at 56.15%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 20.51% is above that of the industry average.
- You can view the full analysis from the report here: MNST Ratings Report
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV