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Monster Beverage Corp

Monster Beverage Corp. Founded in 1985 Previously known as Hansen Natural Corp Changed its name to Monster Beverage Corporation in Jan 2012 Headquartered in Corona, CA Takes up 1.4% of the market Gained volume in 2012 Competitors lost volume. Monster Beverage Corp. Brands include:

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Monster Beverage Corp

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  1. Monster Beverage Corp • Founded in 1985 • Previously known as Hansen Natural Corp • Changed its name to Monster Beverage Corporation in Jan 2012 • Headquartered in Corona, CA • Takes up 1.4% of the market • Gained volume in 2012 • Competitors lost volume

  2. Monster Beverage Corp • Brands include: • Monster Energy • Hansen’s • Peace Tea • Worx Energy • Blue Sky

  3. Comparable Companies • Top 3 Competitors control 88% of the market • The Coca-Cola Company • Dr. Pepper Snapple • PepsiCo • Monster Beverage

  4. Mod 6 Summary • Used Beta from analyst estimates .20 • Similar to Regression Analysis .18 • Used Calculated Enterprise Capital 11.89% • Bloomberg’s WACC 9.2% • Bloomberg states 0% cost of debt capital • No debt? • Bloomberg Beta (.86) is very different from analyst estimates and regression analysis

  5. DCF Model

  6. REI Model

  7. Abnormal Enterprise Income Growth Model

  8. Choosing a Valuation Model AEIG captures value added within the period.

  9. Enterprise Value Comparison • 11.08B > Calculated 3B

  10. Recommendation • Mod 3 • Enterprise Value: $11.5B ($11,213 + $300 [NFL]) • Price per share: $67.55 • No. of Shares Outstanding: 166 million • Yahoo Key Statistics • Enterprise Value: $11.08B • AEIG/REI/DCF • Enterprise Value: $3.6B • Concerning possibly • Sell • Overvalued

  11. Takeaways • Sales Growth of 5% • Not sustainable • 2017 sales growth of 3.75% • 2018 sales growth of 2.25% (back to market rate) • DCF Model=REI Model=AEIG Model • $3,691,635

  12. Questions?

  13. Sources Cited • Photos from Google images • Yahoo Finance: MNST • http://www.beverage-digest.com/pdf/top-10_2013.pdf

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