Here’s a question that will probably stump you. Which stock has provided the best performance over the last 25 years? I don’t want to give it away too quickly, so you’ll have to keep reading to learn more about the little beverage business that quietly delivered jaw-dropping returns to patient, risk-tolerant investors.
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Of course, past performance isn’t a guarantee of future returns. Nevertheless, momentum-focused financial traders will certainly want to know which stock gained more, percentage-wise, than any other stock listed on a major U.S. exchange over the past 25 years. It’s not the one you’d probably expect, but if you’re thirsty for gains, you’ll definitely want to look further into this refreshing runner of a stock.
Move Over, Apple and Microsoft
When you think about the top-gaining stocks of the last 25 years, the first ones that come to mind are probably technology stocks. After all, the emergence of the internet and, more recently, of AI have precipitated the astounding growth of tech titans like Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), and Nvidia (NASDAQ:NVDA).
While those stocks have certainly rewarded long-term investors, the best performer of the past quarter-century actually isn’t in the tech sector. Believe it or not, the big winner is Monster Beverage (NASDAQ:MNST), whose stock ran from $0.05 in September 1998 to $58.73 today, for a 117,360% gain.
We’re talking about an annualized return on investment of more than 30% during that timeframe. Be honest – you probably wish that you had loaded up on MNST stock in the 1990s!
On the other hand, back in 1998, hardly anyone could have known that a line of sports or energy drinks could have competed successfully with Gatorade. In the 1990s, the popular choices in that category were Gatorade and perhaps Powerade. The Monster brand was relatively unknown, and it was reasonable to assume that the next big thing in sports/energy drinks would come from a corporate giant like Coca-Cola (NYSE:KO) or PepsiCo (NYSE:PEP).
Amazing Growth Story Could Continue
The key to Monster Beverage’s success was the marketing of its products as a lifestyle rather than as just a consumable product. There was a sense of machismo attached to Monster drinks – yet, that image is changing in the 2020s. According to HSBC (NYSE:HSBC) analyst Carlos Laboy, Monster Beverages has “skewed heavily to male consumers, but we now see the firm developing its own new labels and acquiring brands that should support recruitment of female consumers in Monster’s largest market, the U.S.”
Despite the amazing long-term performance of MNST stock, today’s investors should have realistic expectations. Another 117,360% gain is possible but seems unlikely. Still, Monster Beverage stock could be a reasonable long-term holding for traders who can handle some volatility.
As we’ll see in a moment, analysts are mostly optimistic about Monster Beverage’s future. Laboy, for example, initiated his coverage of MNST stock with a Buy rating and a $72 price target, which implies moderate upside potential for the shares. Meanwhile, Roth MKM analyst Sean McGowan raised his price target on Monster Beverage shares from $55 to $57, though he also kept his Neutral rating on the stock.
Is MNST Stock a Buy, According to Analysts?
It appears that the analyst community generally expects Monster Beverage stock to move higher. On TipRanks, MNST comes in as a Strong Buy based on 12 Buys and three Hold ratings assigned by analysts in the past three months. The average Monster Beverage price target is $63.71, implying 8.9% upside potential.
If you’re wondering which analyst you should follow if you want to buy and sell MNST stock, the most profitable analyst covering the stock (on a one-year timeframe) is Nik Modi of RBC Capital, with an average return of 18.59% per rating and a 78% success rate. Click on the image below to learn more.
Conclusion: Should You Consider the Best-Performing Stock of the Past 25 Years?
Monster Beverage’s growth story has been nothing less than incredible. However, after all its growth, along with a slight second-quarter 2023 revenue miss and earnings that were just in line with analysts’ expectations, it’s probably not realistic to expect Monster Beverage to continue delivering supersized returns to its shareholders.
Still, I’m optimistic about Monster Beverage as the company reportedly pursues a more inclusive, less macho marketing strategy. That’s a smart move, and, in my opinion, risk-tolerant investors should consider MNST stock for realistic potential gains in the coming years.
