NEW YORK (TheStreet) -- Shares of Monster Beverage Corp (MNST) were jumping, up 4.37% to $132.46 in early market trading Tuesday, after analysts at Citigroup added the company to its 'Focus List' earlier today.
The firm calls Monster Beverage its top pick in U.S. beverages.
Citi analysts are expecting "outsized" sales and earnings growth over the next five years from the energy drink maker.
Citigroup added that it sees "considerable upside" to the stock from its current levels.
The firm maintained its "buy" rating with a $155 price target.
Monster Beverage is a holding company that develops, markets, sells and distributes a variety of alternative beverages including non-carbonated ready-to-drink iced teas, lemonades, and juice cocktails.
The company is based in Corona, Calif.
Separately, TheStreet Ratings team rates MONSTER BEVERAGE CORP as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate MONSTER BEVERAGE CORP (MNST) a HOLD. The primary factors that have impacted our rating are mixed, some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. 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 and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, premium valuation and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 5.2%. Since the same quarter one year prior, revenues slightly increased by 9.5%. 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 2.47, which demonstrates the ability of the company to cover short-term liquidity needs.
- Compared to its closing price of one year ago, MNST's share price has jumped by 81.76%, exceeding the performance of the broader market during that same time frame. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Beverages industry. The net income has significantly decreased by 95.4% when compared to the same quarter one year ago, falling from $95.25 million to $4.41 million.
- Net operating cash flow has significantly decreased to -$81.76 million or 159.93% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- You can view the full analysis from the report here: MNST Ratings Report