Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of B . 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, notable return on equity, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
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Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 2.0%. Since the same quarter one year prior, revenues rose by 14.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving 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 2.78, which clearly demonstrates the ability to cover short-term cash needs.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Beverages industry and the overall market, MONSTER BEVERAGE CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
- MONSTER BEVERAGE CORP has improved earnings per share by 6.8% 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 $1.54 versus $1.15 in the prior year. This year, the market expects an improvement in earnings ($1.89 versus $1.54).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Beverages industry average. The net income increased by 4.5% when compared to the same quarter one year prior, going from $82.39 million to $86.14 million.
Monster Beverage Corporation, through its subsidiaries, develops, markets, sells, and distributes alternative beverage category beverages in the United States and internationally. Monster Beverage has a market cap of $8.91 billion and is part of the consumer goods sector and food & beverage industry. The company has a P/E ratio of 28.6, above the S&P 500 P/E ratio of 17.7. Shares are up 12.8% year to date as of the close of trading on Wednesday.
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--Written by a member of TheStreet Ratings Staff.
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