Stock Analysis on Net

Monster Beverage Corp. (NASDAQ:MNST)

This company has been moved to the archive! The financial data has not been updated since May 7, 2024.

DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin 
Quarterly Data

Microsoft Excel

Two-Component Disaggregation of ROE

Monster Beverage Corp., decomposition of ROE (quarterly data)

Microsoft Excel
ROE = ROA × Financial Leverage
Mar 31, 2024 19.53% = 16.59% × 1.18
Dec 31, 2023 19.82% = 16.84% × 1.18
Sep 30, 2023 19.89% = 16.81% × 1.18
Jun 30, 2023 18.30% = 15.50% × 1.18
Mar 31, 2023 17.51% = 14.64% × 1.20
Dec 31, 2022 16.96% = 14.37% × 1.18
Sep 30, 2022 17.77% = 14.76% × 1.20
Jun 30, 2022 18.01% = 15.00% × 1.20
Mar 31, 2022 19.75% = 16.57% × 1.19
Dec 31, 2021 20.98% = 17.65% × 1.19
Sep 30, 2021 24.47% = 20.51% × 1.19
Jun 30, 2021 26.05% = 21.75% × 1.20
Mar 31, 2021 26.49% = 22.13% × 1.20
Dec 31, 2020 27.31% = 22.73% × 1.20
Sep 30, 2020 25.77% = 20.94% × 1.23
Jun 30, 2020 27.10% = 22.03% × 1.23
Mar 31, 2020 29.07% = 23.05% × 1.26
Dec 31, 2019 26.56% = 21.51% × 1.23
Sep 30, 2019 = × 1.25
Jun 30, 2019 = × 1.25
Mar 31, 2019 = × 1.26

Based on: 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).


The analysis of the quarterly financial performance reveals distinct trends across the key profitability and leverage metrics over the observed periods.

Return on Assets (ROA)
ROA values are available starting from the end of the first quarter of 2020. The metric peaked at 23.05% in June 2020, indicating a high efficiency in utilizing assets to generate profits at that time. Subsequently, there is a clear declining trend through the end of 2022, reaching a low of 14% in September 2022. From this nadir, ROA shows a gradual recovery in 2023 and early 2024, concluding at 16.59% by March 2024. This suggests that while operational efficiency weakened notably during the mid-2020s, it has begun to improve more recently.
Financial Leverage
The financial leverage ratio remained relatively stable across the entire period, fluctuating slightly between 1.18 and 1.26. Notably, it started at 1.26 in early 2019 and generally declined to around 1.18 by early 2024. This slight but consistent reduction in leverage indicates a cautious approach toward debt or obligations relative to equity, potentially reflecting a strategy to maintain a conservative balance sheet posture.
Return on Equity (ROE)
ROE figures, available from the first quarter of 2020 onward, exhibit a pattern somewhat similar to ROA. The highest reported ROE is 29.07% in June 2020, followed by a steady decline reaching 17.77% by December 2022. However, beginning in 2023, ROE trends upward again, finishing near 19.53% in March 2024. This decline and subsequent rebound imply that shareholder profitability was under pressure post-2020 but is currently recovering, benefiting from improved operational performance or capital structure adjustments.

In summary, both profitability indicators (ROA and ROE) reached their peaks in mid-2020, followed by a significant downturn through the end of 2022. A gradual improvement phase has been observed since 2023. The financial leverage remained fairly constant with a slight downward trend, which may have supported the recovery in profitability metrics by reducing financial risk. These trends collectively indicate a period of volatility in profitability with cautious financial management practices throughout the observed timeline.


Three-Component Disaggregation of ROE

Monster Beverage Corp., decomposition of ROE (quarterly data)

Microsoft Excel
ROE = Net Profit Margin × Asset Turnover × Financial Leverage
Mar 31, 2024 19.53% = 22.83% × 0.73 × 1.18
Dec 31, 2023 19.82% = 22.84% × 0.74 × 1.18
Sep 30, 2023 19.89% = 22.62% × 0.74 × 1.18
Jun 30, 2023 18.30% = 21.45% × 0.72 × 1.18
Mar 31, 2023 17.51% = 19.95% × 0.73 × 1.20
Dec 31, 2022 16.96% = 18.88% × 0.76 × 1.18
Sep 30, 2022 17.77% = 19.46% × 0.76 × 1.20
Jun 30, 2022 18.01% = 20.40% × 0.74 × 1.20
Mar 31, 2022 19.75% = 23.32% × 0.71 × 1.19
Dec 31, 2021 20.98% = 24.86% × 0.71 × 1.19
Sep 30, 2021 24.47% = 28.76% × 0.71 × 1.19
Jun 30, 2021 26.05% = 29.88% × 0.73 × 1.20
Mar 31, 2021 26.49% = 30.25% × 0.73 × 1.20
Dec 31, 2020 27.31% = 30.65% × 0.74 × 1.20
Sep 30, 2020 25.77% = 26.99% × 0.78 × 1.23
Jun 30, 2020 27.10% = 26.56% × 0.83 × 1.23
Mar 31, 2020 29.07% = 26.06% × 0.88 × 1.26
Dec 31, 2019 26.56% = 26.37% × 0.82 × 1.23
Sep 30, 2019 = × × 1.25
Jun 30, 2019 = × × 1.25
Mar 31, 2019 = × × 1.26

Based on: 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).


The quarterly financial data presents several significant trends in profitability, efficiency, and leverage over the reported periods.

Net Profit Margin
The net profit margin shows a relatively stable and strong performance from March 2020 through December 2021, maintaining levels mostly above 25%, peaking at approximately 30.65% in March 2021. However, starting in March 2022, there is a notable decline, dropping steadily quarter over quarter to a low near 18.88% by December 2022. Following this decline, a gradual recovery is observed in 2023 and into the first quarter of 2024, with margins climbing back to around 22.83%. This indicates challenges affecting profitability in 2022, with partial but incomplete recovery subsequently.
Asset Turnover
The asset turnover ratio experienced some fluctuations, initially rising from 0.82 in March 2020 to a peak of 0.88 in June 2020, suggesting improved efficiency in utilizing assets to generate sales. After this peak, a gradual decline sets in, stabilizing around 0.71 to 0.74 for most of 2021 and 2022. Towards the end of 2022 and into 2023, the ratio increases slightly, hovering around 0.73 to 0.76, indicating modest improvement but remaining below mid-2020 levels. Overall, asset utilization appears somewhat subdued compared to the mid-2020 peak.
Financial Leverage
Financial leverage remains consistently low and stable across all reported quarters, fluctuating marginally between 1.18 and 1.26. This stability suggests a conservative approach to financing with limited use of debt or other liabilities to amplify equity returns.
Return on Equity (ROE)
ROE follows a pattern similar to the net profit margin, reflecting profitability trends influenced by both operational performance and financial structure. From March 2020 to December 2021, ROE remains relatively high, ranging between approximately 25.77% and 29.07%. From early 2022, a clear downward trajectory is observed, with ROE falling to a low of around 16.96% by March 2023. Subsequent quarters show some recovery, with ROE increasing to just under 20% by late 2023 and early 2024, yet remaining below previous peak levels. This pattern indicates that despite stable leverage, reduced profitability and asset efficiency impacted overall equity returns during this period.

In summary, the data reveals a period of strong profitability and efficient asset use through 2020 and 2021, followed by a pronounced downturn during 2022 affecting profit margins and returns on equity. Asset turnover trends similarly suggest a temporary dip in operational efficiency. Financial leverage remains consistently conservative throughout, implying that changes in ROE are predominantly driven by operating performance rather than changes in capital structure. The partial recovery seen in 2023 and early 2024 indicates some improvement in financial health but does not fully restore the earlier peak performance levels.


Two-Component Disaggregation of ROA

Monster Beverage Corp., decomposition of ROA (quarterly data)

Microsoft Excel
ROA = Net Profit Margin × Asset Turnover
Mar 31, 2024 16.59% = 22.83% × 0.73
Dec 31, 2023 16.84% = 22.84% × 0.74
Sep 30, 2023 16.81% = 22.62% × 0.74
Jun 30, 2023 15.50% = 21.45% × 0.72
Mar 31, 2023 14.64% = 19.95% × 0.73
Dec 31, 2022 14.37% = 18.88% × 0.76
Sep 30, 2022 14.76% = 19.46% × 0.76
Jun 30, 2022 15.00% = 20.40% × 0.74
Mar 31, 2022 16.57% = 23.32% × 0.71
Dec 31, 2021 17.65% = 24.86% × 0.71
Sep 30, 2021 20.51% = 28.76% × 0.71
Jun 30, 2021 21.75% = 29.88% × 0.73
Mar 31, 2021 22.13% = 30.25% × 0.73
Dec 31, 2020 22.73% = 30.65% × 0.74
Sep 30, 2020 20.94% = 26.99% × 0.78
Jun 30, 2020 22.03% = 26.56% × 0.83
Mar 31, 2020 23.05% = 26.06% × 0.88
Dec 31, 2019 21.51% = 26.37% × 0.82
Sep 30, 2019 = ×
Jun 30, 2019 = ×
Mar 31, 2019 = ×

Based on: 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).


Net Profit Margin
The net profit margin commenced reporting from the first quarter of 2020, where it stood at 26.37%. Over the next four quarters of 2020, this margin showed a stable but slightly downward trend, averaging around 26.6% to 27%. Entering 2021, there was a notable increase reaching a peak of 30.65% in Q1, followed by a gradual decline through the end of 2021 and into 2022, reaching a low of 19.46% in Q4 2022. The margin then experienced a modest recovery during 2023, climbing back to approximately 22.84% by Q4 2023 and maintaining a similar level (22.83%) in Q1 2024. This pattern suggests initial strong profitability that weakened considerably in 2022 but showed signs of stabilization and improvement in subsequent periods.
Asset Turnover
Asset turnover ratios were first reported in Q1 2020 at 0.82 and showed slight fluctuation throughout the year. A gradual decline occurred during 2021, dropping to approximately 0.71 by Q4 2021, and this lower level persisted throughout most of 2022. In 2023, the ratio recovered mildly, fluctuating between 0.72 and 0.74, before slightly tapering to 0.73 in Q1 2024. Overall, the asset turnover exhibited a general downward trend with minor recovery, indicating a reduced efficiency in generating revenues from assets during 2021 and 2022, with some improvement in 2023.
Return on Assets (ROA)
The Return on Assets followed a trajectory broadly similar to net profit margin but with a more gradual decline. Starting at 21.51% in Q1 2020, ROA rose slightly to 23.05% in Q2 2020 before beginning a steady decline that continued through 2021 and 2022. ROA reached a low point of 14.37% in Q1 2023 and slowly increased to 16.84% by Q4 2023, settling at 16.59% in Q1 2024. This trend reflects diminishing returns on the company’s assets through 2022, with the subsequent cautious recovery indicating improved but still moderate asset utilization effectiveness.