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Monster Beverage Corporation (MNST) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Monster Beverage Corporation (MNST)

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Intrinsic Value (DCF)

Current$77.50
→
Intrinsic$38.52
-50%
$26.22$38.52$63.01
Market implies 31% growth for 5 years
Current price reflects execution expectations above 12% growth — not unreasonable for quality businesses.
At $78, the market prices in continued strong cash flow growth (31%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $26 → Bull $63. Current price implies expectations above the base case, closer to bull expectations.
Discount ↓Growth →8%10%12%14%
8%$47$51$56$61
10%$33$36$39$42
12%$25$27$29$32
14%$21$22$24$26

Bull Case

  • Bull case ($63) with 15% growth, 8% discount rate
  • Conservative 12% growth assumption is achievable based on track record

Bear Case

  • Bear case ($26) implies 66% downside at 10% growth, 12% discount
  • Price reflects 31% growth expectations vs 12% historical — high bar to clear
  • Trading 50% above base case — execution must exceed assumptions to justify
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5-Year Free Cash Flow Projection

Year 1$1.82B
Year 2$2.04B
Year 3$2.30B
Year 4$2.58B
Year 5$2.89B
Terminal$45.85B

📐 Model Inputs

Growth Rate12.3%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate9.5%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$1.62BTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is MNST stock undervalued or overvalued?
🔴 OVERVALUED

MNST trades at $77.50 vs. our DCF-derived intrinsic value of $38.52, implying -49% downside. Using a 9.5% WACC and 12.3% FCF growth assumption, the current price requires growth rates above our estimates to be justified. Even our bull case ($55.38) suggests limited upside.

What is MNST's intrinsic value?

Using a 5-year DCF model: Base FCF of $1.62B, projected at 12.3% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 9.5% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $-1.16B net debt and dividing by 1.01B shares: Bear $26.77 | Base $38.52 | Bull $55.38. Current price $77.50 implies -49% to base case.

How is MNST's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 12.3% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=9.5%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($37.87B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 23.3x.