The stock jumped 30% to start the year before cooling off in March, following a round of bearish analyst calls on the stock.
Monster Beverage has been a growth machine over the past 10 years, delivering a return of 756%. Demand has remained strong for the company's energy drinks, but increased competition and pricing pressure has analysts concerned about short-term sales growth.
The shares came under pressure in the fall as Coca-Cola (NYSE:KO) announced plans to launch Coke-branded energy drinks. Coca-Cola has had a distribution agreement with Monster Beverage since 2015 in which Coca-Cola became Monster's preferred distribution partner.
Coca-Cola's first branded energy drink will launch in Europe in April, and that seems to have investors worried about Monster's growth this year. However, one important thing investors are overlooking is that Coca-Cola owns 19% of the outstanding shares in Monster Beverage. This ownership gives Coke every incentive to see that Monster remains a growth machine.
Monster's distribution alignment with Coke's bottlers continues to "progress well," according to Monster CEO Rodney Sacks. Monster plans to expand in new international markets to keep sales momentum going.
Despite the stock's dive last month, analysts still expect the company to grow earnings about 15% annually over the next five years.