Monster Beverage CorporationMNSTNASDAQ

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

DCF Valuation

DCF Valuation Summary

Strong Sell

Fair Value: $57.80 per share(market-calibrated)

-30.3%

Upside to Fair Value

Current

$82.90

Pure Model

$55.43

Fair Value

$57.80

Bull Case

$68.96

Bear Case

$44.43

Market Reality Check

Model Terminal Growth

2.50%

Market-Implied Growth

4.31%

Calibrated Growth

2.95%

Fair value uses 75% model / 25% market-implied terminal growth. Pure model: $55.43.

What's Driving This Ratingfor MNST

✓

CapEx already efficient

CapEx at 2.34% 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 29.24% 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.

⚠

Analyst growth decelerates sharply

Revenue growth drops from 20.15% in Year 1 to 2.50% by Year 5 (per analyst consensus). This growth deceleration is a key reason the model may undervalue the stock if growth re-accelerates.

🎯

Market pricing in higher long-term growth

To justify $82.90, the market implies 4.31% perpetual growth — 181bps 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 66.34% indicates efficient cash generation. FCF reaches $2.6B by Year 10 (19.96% 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 Debt1.49%

Tax Rate24.15%

After-tax Cost of Debt1.13%

Equity Weight (E/V)99.55%

Debt Weight (D/V)0.45%

WACC Calculation

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

WACC = (99.55% × 6.53%) + (0.45% × 1.13%)

= 6.50%

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	$9.0B	$10.4B	$11.7B	$12.2B	$13.2B
EBIT	$2.6B	$3.0B	$3.4B	$3.6B	$3.9B
Tax	$636M	$736M	$823M	$864M	$931M
NOPAT	$2.0B	$2.3B	$2.6B	$2.7B	$2.9B
+ Depreciation	$77M	$90M	$100M	$105M	$113M
- Capex	$211M	$244M	$273M	$287M	$309M
- Δ NWC	$450M	$183M	$85M	$89M	$96M
Free Cash Flow	$1.4B	$2.0B	$2.3B	$2.4B	$2.6B
Discount Factor	0.939	0.828	0.730	0.643	0.533
Present Value	$1.3B	$1.6B	$1.7B	$1.6B	$1.4B

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

Terminal Value Calculation

Perpetuity Growth Method

Year 10 FCF$2.6B

Terminal Growth Rate2.50%

WACC6.50%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$67.4B

PV of Terminal Value$35.9B

Exit Multiple Method

Year 10 EBITDA$4.0B

Exit Multiple (EV/EBITDA)20.0x

TV = EBITDA₁₀ × Exit Multiple

Terminal Value$79.4B

PV of Terminal Value$42.3B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs$15.4B

PV of Terminal Value$35.9B

Enterprise Value$51.3B

(-) Net Debt-$1.2B

Equity Value$52.5B

Shares Outstanding1.0B

Price per Share$52.27

Exit Multiple Method

PV of Projected FCFs$15.4B

PV of Terminal Value$42.3B

Enterprise Value$57.7B

(-) Net Debt-$1.2B

Equity Value$58.9B

Shares Outstanding1.0B

Price per Share$58.59

Pure Model Fair Value

$55.43

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%
4.50%	$72.18	$78.05	$86.86	$83.44	$80.15
5.50%	$59.91	$62.80	$66.65	$72.04	$80.13
6.50%	$51.72	$53.37	$55.43	$58.09	$61.62
7.50%	$45.67	$46.70	$47.94	$49.46	$51.36
8.50%	$40.91	$41.60	$42.41	$43.36	$44.50

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

$44.43

-46.4% vs current

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

Base Case

$55.43

-33.1% vs current

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

Bull Case

$68.96

-16.8% vs current

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

Key Assumptions & Drivers• Consumer Defensive Sector

Growth Assumptions (Select Years)

Year 1 Revenue Growth20.15%

Year 3 Revenue Growth6.25%

Year 5 Revenue Growth2.50%

Year 7 Revenue Growth2.50%

Year 10 Revenue Growth2.50%

Terminal Growth Rate2.50%

Margin & Efficiency

Current EBIT Margin29.24%

Tax Rate24.15%

Historical Capex / Rev2.34%

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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