Should You Avoid Monster Beverage Stock, Even With Revenue Growing at 20%?
Key Points
Monster Beverage is a fast-growing energy drink maker executing well in the growing energy drink segment.
The stock's valuation looks high relative to its own history, but it is less expensive than it was not too long ago.
Monster Beverage (NASDAQ: MNST) posted revenue growth of 10.7% in 2025. But, in the first half of 2026, sales rose 23.3%, as the company benefits from strong execution in one of the broader beverage sector's best-performing sub-categories. But, should you buy the stock now that it has pulled back from its all-time highs or avoid it?
Monster Beverage is growing strongly right now
Monster Beverage's growth has clearly kicked into high gear again, with sales growth so far in 2026 running at more than double the rate achieved in 2025. That said, investors are aware of the company's strong growth, as evidenced by its price-to-sales and price-to-earnings ratios, both of which are above their five-year averages. If you have a value bias, you probably won't find Monster Beverage attractive at its current price.
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However, there's a caveat for growth investors. That's because the stock is in the middle of a drawdown, with the price more than 12% below its recent all-time high, as of this writing. Even the most reliable growth stocks don't rise in a straight line; they rise in a jagged pattern. In fact, Monster Beverage has experienced many large drawdowns since it started selling its namesake energy drink, with more than a dozen 20% sell offs since the beverage was launched in 2002 (some of the drawdowns were materially larger than 20%).
With the stock down a bit more than 10% from its all-time high, growth investors might want to add Monster Beverage to their watch list. What's notable here is that the P/S ratio is around 9.4x, which is only a touch higher than the five-year average P/S ratio of 8.4x. And the P/E ratio of 40.5x is only a touch higher than its five-year average of 33.7x. So while Monster looks expensive, it is getting closer to what some might consider a fair price. And for a growth stock, that could represent a good entry point.
Avoid Monster Beverage, but don't ignore it
It probably wouldn't be a mistake to buy Monster Beverage at its current valuation. History suggests that the company's strong growth will eventually lead the stock higher again. However, history also suggests that buying after a 20% drawdown would be a better decision. And since the stock isn't quite there yet, keeping this one on the wish list, for now, looks like the best option.
Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Monster Beverage. The Motley Fool has a disclosure policy.