Shares of Monster Beverage Corp. (NASDAQ:MNST) were up 0.49% in mid-afternoon trading on June 4. The stock has plunged 18.6% in 2018 so far. However, shares have been mostly flat year over year. Does this represent an attractive entry point for investors?
Monster released its first-quarter results on May 8. Net sales jumped 14.7% year-over-year to $850.9 million and gross sales rose 17.2% to $990.6 million. Net sales for its Monster Energy Drinks segment climbed 16.7% from Q1 2017 while its Strategic Brands segment dropped 3.3% year over year. Sales to customers outside the United States increased 26.8% to $242.1 million.
The company reported gross profit as a percentage of sales at 60.6%, which was down from 64.8% in Q1 2017. Monster attributed this to an increase in promotional allowances as a percentage of gross sales, geographical and domestic sales mix, and other cost increases.
Monster also received a boost from the U.S. Tax Cuts and Jobs Act which was signed into law in December 2017. The company saw its effective tax rate fall to 23.3% compared to 32.8% in the same period in 2017. Net income climbed 21.4% to $216.1 million and net income per diluted share rose 23.1% to $0.38.
The international success of Monster is a promising development going forward, and the company has seen a big boon from U.S. tax reform. The stock is trading nearly $20 off of the all-time high it reached in late January. This is a solid entry point for investors on the hunt for a solid growth stock.
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