Markets

Why Shares of Monster Beverage Rose 13.2% in July

What happened

Shares of Monster Beverage (NASDAQ: MNST) rose 13.2% in July, according to data provided by S&P Global Market Intelligence.

The energy drink company's stock price has climbed by 23.2% this year and has been achieving new record highs along the way.

Man drinking red energy drink while standing beside bridge

Image source: Getty Images.

So what

Monster has not experienced any material adverse impact from the COVID-19 pandemic thus far. Due to lockdowns and the decrease in foot traffic in the convenience and gas channel, the company saw an increase in in-home consumption of its beverages rather than immediate consumption. Thus far, only April sales have been adversely impacted, but bottlers and distributors have still been able to distribute Monster's products without delays. 

Investors are probably encouraged by the fact that Monster's business can continue to grow amid the pandemic. As more and more people work and study from home, consumption of energy drinks should also rise as these drinks provide a boost to help people concentrate.

Now what

Monster released its second-quarter 2020 earnings this week, and as expected, net sales dipped by around 1% year over year to $1.1 billion. Net income, however, posted a surprising rise of 6.5% year over year to hit $311.4 million. Management's first-quarter guidance was accurate in that sales did plunge in April, but May and June saw an improvement due to an ease in lockdowns around the world. 

CEO Rodney Sacks expressed satisfaction with Monster's first-half performance, and the company is planning for future launches of its Reign Total Body Fuel high-performance energy drinks as well as its affordable energy drink brands outside the U.S. These initiatives, along with new additions to the Monster Energy portfolio, are expected to continue to buoy sales moving forward.


10 stocks we like better than Monster Beverage
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Monster Beverage wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

 

*Stock Advisor returns as of June 2, 2020

 

Royston Yang has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Monster Beverage. The Motley Fool has a disclosure policy.

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

In This Story

MNST

Latest Markets Videos

The Motley Fool

Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Learn More