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Why Is Monster Beverage (MNST) Down 2.3% Since the Last Earnings Report?
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A month has gone by since the last earnings report for Monster Beverage Corporation (MNST - Free Report) . Shares have lost about 2.3% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock’s next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Monster Beverage Shares Gain on Q4 Earnings Beat
Shares of Monster Beverage rallied more than 14% in afterhours trading on Mar 1, as the energy drink company’s fourth-quarter numbers exceeded expectations even after facing $46.3 million in distribution termination fees.
Monster Beverage’s fourth-quarter adjusted earnings of $0.35 per share beat the Zacks Consensus Estimate of $0.30 by 16.7%. Earnings also increased 59.1% year over year on higher sales.
Sales Detail
Net sales of $753.8 million surpassed the Zacks Consensus Estimate of $724 million by 4.1%. The figure improved 16.8% year over year.
Full-year 2016 net sales were $3 billion, which missed the analysts’ expectation of $3.02 billion. However, the reported figure grew 12% year over year.
Foreign currency had an unfavorable impact of $3.3 million on quarterly net sales and $22.3 million on 2016 net sales.
Net sales outside the U.S. rose 33.2% to $193.5 million in the quarter on a year-over-year basis.
Quarterly Segment Details
Monster Energy Drinks Segment: Net sales at the segment, comprising Monster Energy drinks as well as Mutant Super Soda drinks, were $684.4 million, up 17% year over year.
Strategic Brands segment: This segment includes brands acquired from Coca-Cola. Net sales at the segment increased 6.9% to $64.5 million in the fourth quarter of 2016, compared with $60.4 million in the comparable quarter of 2015.
Other: Net sales for the company's Other segment, which includes some products of American Fruits & Flavors sold to independent third parties, were $4.7 million in the quarter under review. Notably, the segment had reported no net sales in the prior-year quarter.
Margins
Fourth-quarter 2016 gross margin rose 360 basis points (bps) to 66.1%. Operating expenses rose 40.9% year over year to $246.4 million. Operating income in the quarter was $251.7 million, compared with $228.4 million in the prior-year quarter.
Financials
Monster Beverage ended the quarter with cash and cash equivalent of $377.6 million as of Dec 31, 2016, compared with $2.17 billion as of Dec 31, 2015.
On Feb 28, 2017, the company’s board of directors authorized a new repurchase program for the repurchase of up to $500.0 million of the company’s outstanding common stock.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one downward revision for the current quarter.
At this time, Monster Beverage's stock has a nice Growth Score of 'B', a grade with the same score on the momentum front. However, the stock was allocated a grade of 'F' on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
The stock is suitable for growth and value investors, based on our styles scores.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Interestingly, the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.
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Why Is Monster Beverage (MNST) Down 2.3% Since the Last Earnings Report?
A month has gone by since the last earnings report for Monster Beverage Corporation (MNST - Free Report) . Shares have lost about 2.3% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock’s next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Monster Beverage Shares Gain on Q4 Earnings Beat
Shares of Monster Beverage rallied more than 14% in afterhours trading on Mar 1, as the energy drink company’s fourth-quarter numbers exceeded expectations even after facing $46.3 million in distribution termination fees.
Monster Beverage’s fourth-quarter adjusted earnings of $0.35 per share beat the Zacks Consensus Estimate of $0.30 by 16.7%. Earnings also increased 59.1% year over year on higher sales.
Sales Detail
Net sales of $753.8 million surpassed the Zacks Consensus Estimate of $724 million by 4.1%. The figure improved 16.8% year over year.
Full-year 2016 net sales were $3 billion, which missed the analysts’ expectation of $3.02 billion. However, the reported figure grew 12% year over year.
Foreign currency had an unfavorable impact of $3.3 million on quarterly net sales and $22.3 million on 2016 net sales.
Net sales outside the U.S. rose 33.2% to $193.5 million in the quarter on a year-over-year basis.
Quarterly Segment Details
Monster Energy Drinks Segment: Net sales at the segment, comprising Monster Energy drinks as well as Mutant Super Soda drinks, were $684.4 million, up 17% year over year.
Strategic Brands segment: This segment includes brands acquired from Coca-Cola. Net sales at the segment increased 6.9% to $64.5 million in the fourth quarter of 2016, compared with $60.4 million in the comparable quarter of 2015.
Other: Net sales for the company's Other segment, which includes some products of American Fruits & Flavors sold to independent third parties, were $4.7 million in the quarter under review. Notably, the segment had reported no net sales in the prior-year quarter.
Margins
Fourth-quarter 2016 gross margin rose 360 basis points (bps) to 66.1%. Operating expenses rose 40.9% year over year to $246.4 million. Operating income in the quarter was $251.7 million, compared with $228.4 million in the prior-year quarter.
Financials
Monster Beverage ended the quarter with cash and cash equivalent of $377.6 million as of Dec 31, 2016, compared with $2.17 billion as of Dec 31, 2015.
On Feb 28, 2017, the company’s board of directors authorized a new repurchase program for the repurchase of up to $500.0 million of the company’s outstanding common stock.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one downward revision for the current quarter.
Monster Beverage Corporation Price and Consensus
Monster Beverage Corporation Price and Consensus | Monster Beverage Corporation Quote
VGM Scores
At this time, Monster Beverage's stock has a nice Growth Score of 'B', a grade with the same score on the momentum front. However, the stock was allocated a grade of 'F' on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
The stock is suitable for growth and value investors, based on our styles scores.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Interestingly, the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.