The rad energy drink dudes at Hansen Natural (Nasdaq: HANS) are up for their turn at the Wall Street half-pipe on Thursday night, when they'll report earnings for the 2007 fiscal year. Check out what the company did right and wrong in the last report, then come back here and do a gnarly ollie over the double kink, bro. Word!

What Fools say:
Here's how Hansen's CAPS rating stacks up against some of its peers and competitors:

Market Cap (millions)

Trailing P/E Ratio

CAPS Rating

Coca-Cola (NYSE: KO)

$135,816

22.9

****

PepsiCo (NYSE: PEP)

$114,672

21.0

*****

Cadbury Schweppes (NYSE: CSG)

$24,230

30.7

****

Hansen Natural

$4,038

34.1

****

Jones Soda (Nasdaq: JSDA)

$152

234.8

**

Data taken from Motley Fool CAPS and Yahoo! Finance on 02/26/2008.

On the bullish side, CAPS player rknapton turns Hansen inside out and then back again in an epic 1,550-word commentary on the stock that draws on sources like Peter Lynch, Warren Buffett, and Benjamin Graham. The bottom line: Hansen appears undervalued today, and can continue to grow for a very long time even if it (and privately held Red Bull) dominates its niche market today.

The only bearish comment that is recent enough to hold any relevance calls on recession fears: "unemployment reduces discretionary spending." That one came from All-Star player east54.

What management does:
Margins dipped a bit last year as the Anheuser-Busch (NYSE: BUD) distribution deal kicked in and took a cut off the top end of operating results. Hansen took back some of that lost ground in the last quarter, though, and continues to grow sales and earnings at breakneck speeds.

Margins

6/2006

9/2006

12/2006

3/2007

6/2007

9/2007

Gross

52.4%

52.2%

52.3%

52%

52.2%

52.2%

Operating

30%

27.6%

26.2%

23.9%

23.1%

24.9%

Net

18.4%

17%

16.2%

14.9%

14.5%

15.6%

FCF/Revenue

13.3%

15.7%

12.2%

15.1%

13.7%

12.2%

Y-O-Y Growth

6/2006

9/2006

12/2006

3/2007

6/2007

9/2007

Revenue

92.9%

83.4%

73.6%

59.5%

54.5%

46.5%

Earnings

136.4%

82.3%

56%

29.4%

21.8%

34.3%

All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.

One Fool says (OK, two Fools say):
Fellow Fool Rich Smith thinks that Hansen is "at best a 'hold'" today, given a rich valuation next to low-key earnings growth expectations of about 27% per year.

I disagree. Estimating long-term models for high-growth stocks can be difficult, and I think analysts are lowballing us on this one. The energy-drink market is still in its infancy relative to traditional soft drinks, bottled water, and so forth. Monster has only been available at my local grocery store for about two years, but I'm willing to bet that they've stocked Coke bottles since the first store in the chain opened.

Could it be a fad of Crocs or Atkins Diet proportions? OK, anything is possible. But the immediate pick-me-up of a decent energy drink is undeniable. Monster passes both the crucial taste test (for me, at least) and the "hey dude, cool can!" trial-by-peer-pressure, which is why it's getting a foothold in young Middle America. And the international market remains largely untapped, as Red Bull's rampant rage is uncontested in places like Europe and Japan.

Sorry Rich, I think you're wrong this time. Hansen is a screaming "buy."

Read on, rad dude:

Jones Soda is a Motley Fool Rule Breakers pick, but Anheuser-Busch, Cadbury Schweppes, and Coca-Cola are all Motley Fool Inside Value recommendations. Sign up for a free 30-day trial or two and see if there's a market conspiracy against soft drink giants, dude. That would be so uncool. Or just sign up for a free CAPS account to find the identities of your fellow Fools who were quoted above. They might have more to tell you!

Fool contributor Anders Bylund owns share in Hansen and Coke, but holds no other position in any of the companies discussed here. You can check out Anders' holdings if you like, and Foolish disclosure is the Punxsutawney Phil of financial forecasting.