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Factors Influencing Monster Beverage's (MNST) Q4 Earnings

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Monster Beverage Corporation (MNST - Free Report) is slated to release fourth-quarter 2019 results on Feb 27. In the last reported quarter, it recorded a positive earnings surprise of 1.9%. Also, in the trailing four quarters, the company’s bottom line outperformed the Zacks Consensus Estimate by 3.9%, on average.

The Zacks Consensus Estimate for fourth-quarter earnings is pegged at 46 cents, indicating 7% growth from the prior-year quarter’s reported figure. Notably, the consensus mark has been unchanged in the past 30 days. For quarterly revenues, the consensus estimate stands at $996.9 million, which suggests growth of 7.9% from the year-ago quarter’s reported number.

Monster Beverage Corporation Price and EPS Surprise

 

Key Factors to Note

Monster Beverage has been experiencing continued strength in its energy drinks category, which has been one of its driving factors. Notably, a solid international presence and transition to Coca-Cola bottlers have been significantly aiding the company’s global footprint. Notably, Monster Beverage has been expanding international operations in various markets — including China, India, EME, Africa and the Middle Eastern countries. Cumulatively, these have been aiding the company’s top-line performance.

Apart from focusing on the supply chain, it has been concentrating on product innovation to tap the growing preference of consumers. The consistent demand for tasty and healthy beverages has been propelling Monster Beverage to regularly innovate products and flavors.

On its last earnings call, it had stated that additional launches of energy drinks in various international markets — including Mango Loco for Indian consumers, Espresso Monster across the EMEA, Salted Caramel Espresso variant in eight EMEA markets, Monster in Israel, and Predator in selected markets in Eastern Europe and Africa — were lined up for the fourth quarter. Management had also hinted at the expansion of Ultra’s product line in the quarter under review. All these additions might have had a positive impact on the company’s top line in the fourth quarter.

However, unfavorable product mix, increase in manufacturing costs, and rise in freight costs have been weighing on its margins. Also, the company’s exposure to fluctuations in foreign currency is expected to have been a drag.

Zacks Model

Our proven model doesn’t conclusively predict an earnings beat for Monster Beverage this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Although Monster Beverage has a Zacks Rank #2, its Earnings ESP of 0.00% makes surprise prediction difficult.

Stocks With Favorable Combination

Here are some companies that you may want to consider as our model shows that these have the right combination of elements to deliver an earnings beat:

The Hain Celestial Group (HAIN - Free Report) presently has an Earnings ESP of +0.22% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Casey’s General Stores (CASY - Free Report) currently has an Earnings ESP of +3.45% and a Zacks Rank #3.

Freshpet (FRPT - Free Report) currently has an Earnings ESP of +17.65% and a Zacks Rank #3.

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