Is Monster Beverage Corp. overvalued or undervalued?

As of 25 August 2025, the valuation grade for Monster Beverage Corp. has moved from expensive to very expensive, indicating a significant shift in its perceived value. The company is currently overvalued, with a P/E ratio of 45, a Price to Book Value of 10.56, and an EV to EBITDA ratio of 32.88, all of which are notably higher than its peers. For comparison, The Coca-Cola Co. has a P/E ratio of 38.37 and an EV to EBITDA of 35.39, while PepsiCo, Inc. shows a P/E of 25.36 and an EV to EBITDA of 17.16, highlighting the premium at which Monster is trading.
In terms of recent performance, Monster Beverage Corp. has outperformed the S&P 500 on a year-to-date basis, returning 22.98% compared to the index's 12.22%. However, over longer periods, such as the 3-year and 5-year returns, it has lagged behind the S&P 500, which returned 70.41% and 96.61%, respectively. This suggests that while the company has had a strong recent performance, its high valuation may not be justified in the context of its longer-term growth relative to the broader market.