Monster’s Stock Energized By Market Share And New Product Growth
Summary
Monster Beverage is growing market share in multiple countries.
Monster’s new products will add to the company’s growth.
The above average growth rate will drive the stock to outperform.
I last wrote about Monster Beverage (MNST) in May 2016, which you can read here. In that article, I explained how Monster would grow through its partnership with Coca-Cola (KO). Monster is growing within Coca Cola’s distribution system. This is allowing Monster Beverage to gain market share internationally.
Monster’s results are showing that the company is increasing market share in many countries outside of the United States. The company is also introducing new drinks, which can attract new customers. The combination of sales increases for existing products, new products added, and global market share growth are likely to drive Monster to grow revenue and earnings at an above average pace.
Monster’s Global Market Share Growth
Monster achieved market share growth in the following countries during Q2 2017: Canada, Japan, New Zealand, Germany, Norway, Spain, Belgium, Czech Republic, Italy, Ireland, and South Africa. Data from Nielsen shows that Monster’s competitors, Red Bull and Rockstar experienced market share declines in Canada, while Monster increased market share.
This demonstrates that Monster is increasing its distribution and that its products are selling well on a global basis. I think market share growth is a key factor for Monster’s future. The market share growth will help drive Monster to achieve double-digit revenue and earnings growth for 2017 and 2018.
Overall, Monster’s sales increased 2.2% for its existing beverages such as Monster, NOS, and Full Throttle in Q2. At the same time, competitors Rockstar, 5-hour Energy, and AMP experienced sales declines of 1%, 8.7%, and 25.8% respectively. Competitor, Red Bull experienced a 2% sales increase. So, Monster is showing an edge over the energy drink market, which only increased 0.8% in Q2.
