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, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
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Highlights from the ratings report include:
- MNST's revenue growth has slightly outpaced the industry average of 2.2%. Since the same quarter one year prior, revenues slightly increased by 6.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in 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. To add to this, MNST has a quick ratio of 2.01, which demonstrates the ability of the company to cover short-term liquidity needs.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. 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's earnings per share declined by 9.8% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, MONSTER BEVERAGE CORP increased its bottom line by earning $1.86 versus $1.54 in the prior year. This year, the market expects an improvement in earnings ($2.13 versus $1.86).
- Net operating cash flow has increased to $45.89 million or 24.81% when compared to the same quarter last year. Despite an increase in cash flow, MONSTER BEVERAGE CORP's cash flow growth rate is still lower than the industry average growth rate of 58.63%.
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 $9.4 billion and is part of the consumer goods sector and food & beverage industry. The company has a P/E ratio of 31.00, above the S&P 500 P/E ratio of 18.00. Shares are up 7.6% year to date as of the close of trading on Thursday.
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--Written by a member of TheStreet Ratings Staff.
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