What Happened?
Shares of energy drink company Monster Beverage (NASDAQ:MNST) fell 5.2% in the pre-market session after the company reported disappointing first quarter 2025 results: while gross margin beat expectations, revenue missed significantly. Revenue dropped over 2%, weighed down by fewer orders from distributors, currency hits overseas, and a sharp fall in alcohol-related sales. Management did point to stronger sales in April and solid retail numbers for energy drinks overall, which could mean things are turning around. Overall, this quarter could have been better.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Monster? Access our full analysis report here, it’s free.
What The Market Is Telling Us
Monster’s shares are not very volatile and have only had 4 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 9 months ago when the stock dropped 11.9% on the news that the company reported weak second-quarter 2024 results. Its revenue unfortunately missed analysts' expectations, and its EPS missed Wall Street's estimates.
Citing some of the drivers of the weak performance, management added, "The energy drink category in the United States and in certain other countries experienced lower growth rates in the second quarter. Retailers have reported a reduction in convenience store foot traffic, and we have seen a shift at retail towards more mass and dollar channels. Other beverage and consumer packaged product companies have also seen a tighter consumer spending environment and weaker demand in the quarter." Overall, this was a weaker quarter for Monster.
Monster is up 17% since the beginning of the year, and at $61.18 per share, has set a new 52-week high. Investors who bought $1,000 worth of Monster’s shares 5 years ago would now be looking at an investment worth $1,843.
Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we’ve identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link.