MNST – Market expectations are for record-high Uniform ROA, but management may be concerned about growth, market share, and inventory

February 23, 2021

  • Monster Beverage Corporation (MNST:USA) currently trades near historical highs relative to UAFRS-based (Uniform) earnings, with a 37.5x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management may be concerned about Oceania’s sales growth, their ability to gain market share in Chile, and their inventory build
  • Specifically, management may lack confidence in their ability to sustain sales growth in Oceania, build inventory to support retail growth, and gain more market share, particularly in Chile. They may also have concerns about the impact of the OXXO convenience chain dominating the Mexico market and the accuracy of Nielsen statistics in the EMEA region