Monster trades at $52.12 and has moved in lockstep with the market. Its shares have returned 6.1% over the last six months while the S&P 500 has gained 10.6%.
Is now a good time to buy MNST? Find out in our full research report, it’s free.
Why Is MNST a Good Business?
Founded in 2002 as a natural soda and juice company, Monster Beverage (NASDAQ:MNST) is a pioneer of the energy drink category, and its Monster Energy brand targets a young, active demographic.
1. Long-Term Revenue Growth Shows Strong Momentum
A company’s long-term sales performance signals its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Luckily, Monster’s sales grew at a solid 11.7% compounded annual growth rate over the last three years. Its growth beat the average consumer staples company and shows its offerings resonate with customers. 
2. Operating Margin Reveals a Well-Run Organization
Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.
Monster has been a well-oiled machine over the last two years. It demonstrated elite profitability for a consumer staples business, boasting an average operating margin of 27.5%. This result isn’t surprising as its high gross margin gives it a favorable starting point.
3. Excellent Free Cash Flow Margin Boosts Reinvestment Potential
If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.
Monster has shown terrific cash profitability, driven by its lucrative business model that enables it to reinvest, return capital to investors, and stay ahead of the competition. The company’s free cash flow margin was among the best in the consumer staples sector, averaging 21.2% over the last two years.
Final Judgment
These are just a few reasons Monster is a high-quality business worth owning, but at $52.12 per share (or 28.1× forward price-to-earnings), is now the time to initiate a position? See for yourself in our full research report, it’s free.
Stocks We Like Even More Than Monster
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