Why Monster Beverage Stock Popped 8.6% Higher Friday Morning

Shares of Monster Beverage (NASDAQ: MNST) fizzed and sparkled on Friday morning. A robust earnings report lit a fire under the energy drink veteran's stock, driving it as much as 8.6% higher in the morning session. Monster calmed down to a 6.2% gain by noon ET.

Monster's Q4 numbers weren't exactly beastly

I called Monster's fourth-quarter report "robust," not "fantastic." With revenues growing 4.7% year over year to $1.81 billion, the company beat Wall Street's consensus estimate by a rounding error. On the bottom line, Monster's $0.38 of earnings per share fell short of the $0.40 analyst target.

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These results are adjusted, removing the impact of some significant headwinds. Chiefly, it recorded $130.7 million of goodwill impairment charges to account for disappointing results in the alcoholic brands segment. Without these adjustments, generally accepted accounting principles (GAAP) earnings fell 20% year over year to $0.28 per share.

Winning where it matters most

The flagship Monster brand posted 13.7% annual growth in the fourth quarter, boosting its energy drink market share from 29.3% to 30%. The company is winning despite challenges like the health-oriented Celsius drinks, and the Alani Nu brand, targeted at young female consumers.

Meanwhile, Monster is not giving up on the rocky progress of alcoholic drink sales. For instance, the Beast product line will launch overseas this summer. This could be a long-lived growth story, like the zero-sugar and workout-related beverage trends have been. It could also be a dud in the long run, comparable to the fairly short-lived hard seltzer boom. People are still buying alcohol-laced seltzer drinks, but the sales started shrinking in 2023.

All this means time will tell how Monster's alcoholic drink adventure will play out, but the fundamental strength of its Monster-branded drinks give management the freedom to play around with new ideas.

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Anders Bylund has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Celsius and Monster Beverage. The Motley Fool has a disclosure policy.