Why Monster Beverage Shares Roared

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of energy-drink specialist Monster Beverage (NAS: MNST) surged 12% today after its quarterly results easily topped Wall Street expectations.

So what: Monster's first-quarter beat was so impressive -- EPS of $0.41 on revenue of $454.6 million versus Wall Street's view of just $0.38 and $447.1 million -- that analysts have no choice but to raise their growth expectations on the stock. Operating margins even rose to 27.8% from 24.8% in the year-ago period, fueling plenty of optimism about its future profitability as well.

Now what: Don't expect the growth momentum to wane anytime soon. "We are continuing to expand into new international markets and retail sales of Monster Energy commenced in Hong Kong and Macau during April and in Japan and Ecuador earlier this week," CEO Rodney Sacks said. "We are planning launches in additional international markets later this year." However, with the stock now up more than 100% over the past year and trading at a P/E of around 45, I'd be cautious about taking too big of a gulp of Monster right now.

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At the time thisarticle was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of Monster. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

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