Monster (NASDAQ:MNST) is a $30 billion company today. Investors that bought shares one year ago are sitting on a -0.3% total return. That's below the S&P 500's return of 16.83%.
Monster stock is underperforming the market. It's beaten down, but it reports earnings on Tuesday. So is it a good time to buy? To answer this question, we've turned to the Investment U Stock Grader. Our Research Team built this system to diagnose the financial health of a company.
Our system looks at six key metrics...
✗ Earnings-per-Share (EPS) Growth: Monster reported a recent EPS growth rate of 14.81%. That's below the beverages industry average of 19.29%. That's not a good sign. We like to see companies that have higher earnings growth.
✗ Price-to-Earnings (P/E): The average price-to-earnings ratio of the beverages industry is 38.44. And Monster's ratio comes in at 38.58. Its valuation looks expensive compared to many of its competitors.
✓ Debt-to-Equity : The average price-to-earnings ratio of the beverages industry is 38.44. And Monster's ratio comes in at 38.58. Its valuation looks expensive compared to many of its competitors.
✓ Free Cash Flow per Share Growth : Monster's FCF has been higher than that of its competitors over the last year. That's good for investors. In general, if a company is growing its FCF, it will be able to pay down debt, buy back stock, pay out more in dividends and/or invest money back into the business to help boost growth. It's one of our most important fundamental factors.
✓ Profit Margins : The profit margin of Monster comes in at 23.98% today. And generally, the higher, the better. We also like to see this margin above that of its competitors. Monster's profit margin is above the beverages average of 13.4%. So that's a positive indicator for investors.
✓ Return on Equity : Return on equity gives us a look at the amount of net income returned to shareholders. The ROE for Monster is 17.06%, and that's above its industry average ROE of 16.75%.
Monster stock passes four of our six key metrics today. That's why our Investment U Stock Grader rates it as a Buy With Caution.