Monster Beverage CorporationMNSTNASDAQ

Overview Intelligence Charts News Fundamentals Key Metrics TTM Financials Earnings Growth Rating Analysts Institutional Peers Historical

DCF Valuation

DCF Valuation Summary

Sell

Fair Value: $63.63 per share(market-calibrated)

-21.5%

Upside to Fair Value

Current

$81.06

Pure Model

$61.60

Fair Value

$63.63

Bull Case

$77.15

Bear Case

$49.16

Market Reality Check

Model Terminal Growth

2.50%

Market-Implied Growth

3.93%

Calibrated Growth

2.86%

Fair value uses 75% model / 25% market-implied terminal growth. Pure model: $61.60.

What's Driving This Ratingfor MNST

✓

CapEx already efficient

CapEx at 2.27% of revenue is already at or below sector maintenance level. No normalization needed — cash conversion is already strong.

✓

Premium margins already priced in

EBIT margin of 27.97% is already well above sector average. The model holds this level — there's limited room for margin expansion to drive upside. Valuation depends primarily on revenue growth.

↑

Strong near-term revenue growth

Analyst consensus projects 10.97% revenue growth in Year 1, fading to 7.47% by Year 5 and 2.50% by Year 10. Revenue reaches $15.2B by Year 10 (vs $8.3B today).

🎯

Market pricing in higher long-term growth

To justify $81.06, the market implies 3.93% perpetual growth — 143bps above the model's 2.50%. This suggests the market sees additional growth catalysts (AI, new products, market expansion) not captured in analyst estimates.

✓

Strong cash flow conversion

Year 10 FCF/EBITDA conversion of 66.77% indicates efficient cash generation. FCF reaches $2.9B by Year 10 (19.09% FCF margin).

Weighted Average Cost of Capital (WACC)

Cost of Equity (CAPM)

Risk-Free Rate (Rf)4.50%

Beta (β)0.45

Market Risk Premium4.50%

*Using current implied premium (4.5% per Damodaran 2026), not historical (6.5%)

Cost of Equity (Re)6.53%

Cost of Debt

Pre-tax Cost of Debt5.00%

Tax Rate23.25%

After-tax Cost of Debt3.84%

Equity Weight (E/V)100.00%

Debt Weight (D/V)0.00%

WACC Calculation

WACC = (E/V × Re) + (D/V × Rd × (1-Tc))

WACC = (100.00% × 6.53%) + (0.00% × 3.84%)

= 6.53%

10-Year Free Cash Flow Projections(showing years 1, 3, 5, 7, 10)

Year	Year 1	Year 3	Year 5	Year 7	Year 10
Revenue	$9.2B	$10.9B	$12.2B	$13.7B	$15.2B
EBIT	$2.6B	$3.0B	$3.4B	$3.8B	$4.3B
Tax	$598M	$707M	$794M	$892M	$989M
NOPAT	$2.0B	$2.3B	$2.6B	$2.9B	$3.3B
+ Depreciation	$58M	$68M	$77M	$86M	$96M
- Capex	$209M	$247M	$278M	$312M	$346M
- Δ NWC	$271M	$257M	$253M	$213M	$111M
Free Cash Flow	$1.6B	$1.9B	$2.2B	$2.5B	$2.9B
Discount Factor	0.939	0.827	0.729	0.642	0.531
Present Value	$1.5B	$1.6B	$1.6B	$1.6B	$1.5B

FCF Formula: Free Cash Flow = NOPAT + Depreciation - Capex - Change in Net Working Capital

Terminal Value Calculation

Perpetuity Growth Method

Year 10 FCF$2.9B

Terminal Growth Rate2.50%

WACC6.53%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$74.0B

PV of Terminal Value$39.3B

Exit Multiple Method

Year 10 EBITDA$4.3B

Exit Multiple (EV/EBITDA)20.0x

TV = EBITDA₁₀ × Exit Multiple

Terminal Value$87.0B

PV of Terminal Value$46.2B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs$15.7B

PV of Terminal Value$39.3B

Enterprise Value$55.0B

(-) Net Debt-$2.1B

Equity Value$57.1B

Shares Outstanding984M

Price per Share$58.08

Exit Multiple Method

PV of Projected FCFs$15.7B

PV of Terminal Value$46.2B

Enterprise Value$62.0B

(-) Net Debt-$2.1B

Equity Value$64.0B

Shares Outstanding984M

Price per Share$65.12

Pure Model Fair Value

$61.60

Average of perpetuity growth and exit multiple methods (before market calibration)

Sensitivity AnalysisPrice per Share

WACC ↓ / Growth →	1.50%	2.00%	2.50%	3.00%	3.50%
4.52%	$80.14	$86.63	$96.32	$93.28	$89.62
5.53%	$66.55	$69.75	$74.02	$79.98	$88.88
6.53%	$57.46	$59.30	$61.60	$64.54	$68.46
7.52%	$50.76	$51.91	$53.30	$54.99	$57.09
8.53%	$45.49	$46.26	$47.16	$48.23	$49.50

How to read: This table shows how the valuation changes with different WACC (discount rate) and terminal growth rate assumptions. Green = undervalued, Red = overvalued.

Scenario Analysis

Bear Case

$49.16

-39.3% vs current

• -25% vs analyst consensus
• Terminal growth: 2.0%
• Beta: 0.56

Base Case

$61.60

-24.0% vs current

• Analyst consensus
• Terminal growth: 2.5%
• Beta: 0.45

Bull Case

$77.15

-4.8% vs current

• +25% vs analyst consensus
• Terminal growth: 3.0%
• Beta: 0.38

Key Assumptions & Drivers✓ Using Analyst Consensus Estimates• Consumer Defensive Sector

Growth Assumptions (Select Years)

Year 1 Revenue Growth10.97%

Year 3 Revenue Growth8.61%

Year 5 Revenue Growth7.47%

Year 7 Revenue Growth5.48%

Year 10 Revenue Growth2.50%

Terminal Growth Rate2.50%

Margin & Efficiency

Current EBIT Margin27.97%

Terminal EBIT Margin29.17%

Tax Rate23.25%

Historical Capex / Rev2.27%

NWC / Revenue29.83%

Key Drivers: Revenue growth, operating margin expansion, capex efficiency, and working capital management are the primary drivers of cash flow generation. Terminal value assumptions significantly impact final valuation.

Institutional-Grade Methodology

Actual Company Data: Revenue, EBIT, Capex, NWC, Tax Rate, Interest Expense, Beta

Market Assumptions: Risk-free: 4.5% (10Y), MRP: 4.5% (Damodaran 2026), Exit: 20x EV/EBITDA (Consumer Defensive sector)

This DCF model is for informational purposes only. Projections are based on assumptions that may not materialize. Past performance does not guarantee future results. Consult a financial advisor before making investment decisions.

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