Monster Beverage Corporation DCF Stock Analysis. Buy or Sell?

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Monster Beverage Corporation DCF Stock Analysis.

Here’s my assumptions:

Risk Free Rate (10 Years Interest Rate Swap): 4.225%

Risk Premium (Taken from the Aswath Damodaran equity premium spreadsheet): 4.33%

Interest Rate Spread on The Risk free rate ( For the cost of debt calculation): 1% (that’s because Moster has a very low debt/capital ratio)

Weighted average cost of capital assumption for the next 2 years: 8.5%

Weighted average cost of capital assumption from 2 years from now until: 7%

Weighted average cost of capital assumption for the perpetual growth calculation: 6% (that’s because I expect the company to rely more on debt and less on equity in the future)

Historical Data

Revenue growth in the last 10 years (CAGR): 10.65%

Earnings growth in the last 10 years (CAGR): 12.19%

Unlevered Free Cash Flow growth in the last 10 years (CAGR): 8.82%

Future Assumptions

End of Year FCF growth: 5%

Growth until end of 2026: 10%

Growth until end of 2034: 6%

Perpetual growth: 3%

Net Debt: -2.519B

Outstanding Stock Options Present Value Assumption: $1.235B (assumptions for making the Black & Scholes model:

  • trading price: current trading price, around $77
  • strike price (average) as reported on the 10K: $38,98
  • risk free rate (10 years IRS): 4.225%
  • expected volatility (average of the past years as reported on the 10K): 27.4%
  • options duration: 4.5 years (it’s less that reported on the 10K because I expect the options to be exercised sooner that expiration date)

Restricted Stock Units Present Value Assumption: $0.129B

Stock Valuation based on these assumptions: $62

Last update 12/28/2025

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Let me know if you would like to access the excel models I use to make these valutions. Feel free to answer “Yes” to this email.

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Data source: Seeking Alpha​

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All the content in this newsletter should be taken as informational content only. THIS IS NOT FINANCIAL ADVICE! Do your own Due Diligence before investing or contact a professional financial advisor.

I don’t have a position in Monster Beverage Corporation (MNST) and I don’t plan to add a position in the coming days.

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