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Monster Beverage (MNST) misses second-quarter earnings estimates

Monster Beverage (MNST) exited with a quarterly earnings of $0.51 per share, below Zacks Consensus’ estimate of $0.68 per share. That compares with earnings of $0.75 per share a year ago. These numbers are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of -25%. A quarter ago, this energy drink maker was expected to generate earnings of $0.60 per share when it actually yields earnings of $0.55, surprisingly -8.33%.
Over the past four quarters, the company hasn’t been able to beat its consolidated earnings per share estimates.
monster drink, which belongs to Zacks Beverages – the soft drink industry, generated revenue of $1.66 billion for the quarter ended June 2022, topping Zacks’ consensus estimate by 2.57%. This compares to last year’s revenue of $1.46 billion. The company has topped its consolidated revenue estimates four times over the past four quarters.

The sustainability of the stock’s immediate price action based on recently released numbers and future earnings expectations will depend mostly on management’s comment on the earnings call.
Monster Beverage shares have added about 0% since the start of the year versus the S&P 500’s -12.8% decline.
What’s next for Monster?
While Monster Beverage has outperformed the market so far this year, the question on investors’ minds is: What’s next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company’s earnings forecast. This includes not only the current agreed earnings forecast for the upcoming quarter(s), but also how those forecasts have changed recently.
Empirical research shows a strong relationship between near-term stock movements and trends in earnings estimate revisions. Investors can track these reviews themselves or rely on a tried and tested rating tool like Zacks Rank, which has a strong track record of leveraging the power of earnings estimate revisions.
Ahead of this earnings announcement, the trend of review estimates for Monster Beverage: mixed. While the volume and direction of discretionary revisions can change after the company’s just released earnings report, the current situation translates to Zacks Rank #3 (Hold) for the stock. Therefore, the shares are expected to perform in line with the market in the near future. You can see the full list of Zacks #1 stocks (strong buy) today here.

It will be interesting to see how the estimates for the upcoming quarters and the current fiscal year change in the coming days. The current estimate consistent with EPS is $0.71 on $1.65 billion in revenue for the next quarter and $2.67 on $6.4 billion in revenue for the current fiscal year.
Investors should be aware of the fact that the outlook for the industry can have a material impact on the stock’s performance as well. In terms of Zacks Industry Ranking, Beverages – Soft drinks are currently in the top 30% of the 250 plus Zacks industries. Our research shows that the top 50% of industries ranked by Zacks outperform the bottom 50% by a factor of more than 2 to 1.
Alkaline Water Company Inc. (WTER), another stock in the same industry, has not yet announced results for the quarter ending June 2022.
This company is expected to report a quarterly loss of $0.05 per share in its next report, which represents a +37.5% year-over-year change. Our consolidated earnings per share estimate for the quarter has been revised 16.7% higher over the past 30 days to the current level.
The Alkaline Water Company is expected to generate $16.94 million in revenue, an increase of 20% over the previous quarter.

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The opinions and opinions expressed here are those of the author and do not necessarily reflect the views and opinions of Nasdaq, Inc.