Buffett Brain · Research note
Score updated 26 Sept 2026
MNST· Consumer Staples
Monster Beverage
Monster Beverage's 21.9% ROIC and 29.3% operating margin show a strong moat, but a P/E of 42.9 raises valuation concerns.
Buffett fit
Strong fit
Owner
76
Durability
83
Management
91
Price
1
Score updated 26 Sept 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Consumer Staples stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
Owning 100% of Monster Beverage, we'd focus on maintaining its brand strength and expanding internationally.
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Monster's durability is supported by its strong brand and consistent profitability over the last five years.
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Management has effectively reduced share count by 1.99% annually, enhancing shareholder value.
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Current valuation metrics like a of 42.9 and yield of 2.26% suggest the stock is priced for high growth.
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- The full reasoning behind all four pillars
- The 5-year price target and the return it implies
- What would change the call
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
8- 1 of 21.9% is top-quintile in the Consumer Defensive sector.
- 2 of 29.3% is significantly above the sector's top-quintile cutoff of 17.4%.
- 3Net margin of 23.1% indicates strong profitability.
- 4 of 55.5% reflects strong brand .
Concerns
7- 1 of 42.9 suggests high growth expectations are priced in.
- 2 yield of 2.26% is well below the desired 8-10% range.
- 3EV/ of 35.1 indicates a premium valuation.
- 4Valuation metrics like EV/Sales of 9.67 are on the high side.
Price history
$46.35+1.2%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
Monster Beverage develops, markets, and distributes energy drinks under brands like Monster Energy and Reign. It sells to a wide range of customers, including retail grocery, convenience chains, and e-commerce. The company operates with a high of 55.5%, indicating strong . Unit economics are robust, with an of 29.3%, highlighting efficient operations.
How this analysis has moved
The call has held across 6 reviews.
Sep 27, 2026 → Oct 29, 2026
What other investors would say
The same company, judged by three other documented playbooks.
Keep researching
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