Monster Beverage (MNST) stock dropped more than 8% in Thursday’s pre-market trading after missing earnings and sales estimates for the second quarter of Fiscal 2024. The company’s adjusted earnings per share (EPS) rose 5.1% year-over-year to $0.41 but missed the consensus of $0.45. Also, revenues grew 2.7% year-over-year to $1.90 billion but lagged the Street’s estimates of $2.02 billion.
Monster Beverage manufactures and sells energy drinks, concentrates, and alcoholic beverages. It owns some of the renowned brands such as Monster Energy, Burn, The Beast Unleashed, and Relentless.
Here’s What Hit Monster Beverage’s Q2 Results
Monster Beverage’s Q2 2024 results were impacted by unfavorable foreign exchange and lower growth rates in the energy drinks market in the U.S. and other regions. Moreover, co-CEO Hilton H. Schlosberg noted that there is a visible reduction in convenience store foot traffic, which is weighing on its sales. Retailers are seeing traffic moving to cheaper channels such as dollar stores, he added.
Meanwhile, net sales from the Monster Energy Drinks segment rose 3.3%, while Strategic Brands segment sales jumped 9.6% compared to Q2 FY23. However, net sales from the Alcohol Brands segment declined 31.9% year-over-year mainly due to a decrease in volume sales of flavored malt beverages. As seen in the graph below, the company’s Monster Energy Drinks segment is its largest revenue contributor.
Interestingly, Monster Beverage plans to hike the prices of some of its core products and packages by 5% in the U.S., effective November 1. The company continues to innovate and launch new products to capture a larger share of both alcoholic and non-alcoholic beverage markets.
Hedge Funds Offload MNST Stock
TipRanks’ Hedge Funds Trading Activity tool shows that hedge funds are offloading Monster Beverage stock. Currently, MNST has a Very Negative Hedge Fund Confidence Signal, as hedge funds decreased their MNST holdings by 1.9 million shares in the last quarter.
Is Monster Beverage a Good Stock to Buy?
On TipRanks, MNST has a Moderate Buy consensus rating based on ten Buys, four Holds, and two Sell ratings. The average Monster Beverage price target of $58.33 implies 15.4% upside potential from current levels. Year-to-date, MNST shares have declined 12.3%.
It is important to note that these ratings are subject to change, as analysts are expected to revisit their recommendations in reaction to the Q2 print.
