What Happened:
Shares of energy drink company Monster Beverage (NASDAQ:MNST) fell 11.9% in the morning session after the company reported second-quarter earnings 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.
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What is the market telling us:
Monster’s shares are not very volatile than the market average and over the last year have had only 2 moves greater than 5%. Moves this big are very rare for Monster and that is indicating to us that this news had a significant impact on the market’s perception of the business.
Monster is down 23.2% since the beginning of the year, and at $44.97 per share it is trading 26.1% below its 52-week high of $60.85 from March 2024. Investors who bought $1,000 worth of Monster’s shares 5 years ago would now be looking at an investment worth $1,447.
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