Should I Buy Monster Beverage (MNST)? Finance YouTuber Analysis

The analyst advises avoiding Monster stock despite its superior financial performance compared to Celsius. Monster is currently trading at $97, which is above the analyst's calculated fair value of $67 per share, and near its 52-week high. Its forward price-to-earnings ratio of 42 is considered relatively expensive for a beverage company.

“But I calculated a fair value for this business at $67 per share and so at 97, the stock looks overvalued.”

The analyst bought Monster Beverage for its long-term growth potential, citing its current all-time high earnings, recovering margins after raw material cost increases, and international expansion opportunities. The stock is considered undervalued based on its historical P/E ratio, offering an expected annual return of 12% over the next 2.5 years.

“Monster Beverage ist eine Aktie im Lebensmittelbereich sage ich mal im weiteren Sinne die gut ins firmendepot gepasst hat weil da hab W noch blank da gibt's nicht so viel aus der Lebensmittelbranche wo man investieren kann wenn man überdurchschnittlich hohe Kursgewinner im Visier hat insofern hat die Aktie gut reingepasst und war das mein erster Kauf”

The analyst believes Monster Beverage is a wonderful company with strong fundamentals, including consistent revenue and earnings growth, robust free cash flow, and zero debt. However, he finds the current stock price of $96 per share too high, trading at a premium valuation of 24 times EBITDA, which offers insufficient cushion for a market-beating return, especially given economic uncertainties and inflation. He would consider buying if the price drops to around $86 or lower to achieve a more attractive risk-adjusted return.

“I think the price is just a smidge too high and I would like to see that price come down if it does fantastic.”