/biz/ - Business & Finance

>>53664709
>And yet their EPS every quarter can't break above 0.6. That gives them a P/E ratio of 45. In 2 weeks we get to see consumers again cut back in inflation-adjusted terms.
Now we're talking. Yeah, MNST has a high valuation / price/sales multiple for a consumer staples. But the entire consumer staples basket has been catching a bid for the last few quarters,

MNST has a very high PE, PEG, PB, PCF.

But what you're forgetting the secret sauce:
truly sensational returns like MNST and TSCO require more than EPS growth.

They both BENEFITTED from ~500%+ P/E Multiple expansion.

If you can find a stock positioned for sustainable EPS growth + P/E multiple expansion, you might be on to something

In early 2002, MNST was trading at 15x earnings. Today the P/E ratio is 45ish as you pointed out. Therefore multiple expansion contributed 3x of the returns. MNST earnings were about $3 million in 2002 comparison to the TTM earnings of $1.2 billion now.

Earnings growth of ~35% over the period, drove a 400x return since 2002.

In 2002, there were approximately 496,3 million shares outstanding; now, there are 522,1 million, which contributes to a negative return of 0.92x.

3 * 400 * 0.92 = ~1100x total return or 42% CAGR

that is how Monster Beverage Corporation has achieved an 42% CAGR over 20 years

MNST is definitely a pretty expensive consumer staple, but it is for a good reason.

CELH is a ratshit equity tranche scam