The shares of Monster Beverage Corporation (NASDAQ:MNST) and Twitter, Inc. (NYSE:TWTR) were among the active stocks of the last trading sessions. Monster Beverage Corporation (NASDAQ:MNST) declined to -3.17% closing at the price of $54.14 whereas the shares of Twitter, Inc. (NYSE:TWTR) declined -2.31% with the decrease of -0.81 points closing at the price of $34.18. Monster Beverage Corporation has currently increase 9.88% in its stock over the period of 6-months while its rival Twitter, Inc. added 4.37% in the previous 6-months.
Now we have to analyze the facts that if the stocks were worthy off investors’ money? The facts to analyze here are risks, profitability, returns and price trends.
Returns and Profitability
Profitability and returns are the main reason of investment, the investors are looking for profits that they get and return they should expect over the period of time.
The first and foremost return that is considered while making an investment is the ROI or Return on Investment. The ROI is the ratio between the profit against the cost of investment. Currently the ROI of Monster Beverage Corporation (NASDAQ:MNST) is 22.1% while the ROI of Twitter, Inc. (NYSE:TWTR) is 4.6%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, MNST’s EBITDA Margin is 21.63 whereas TWTR’s is 31.96.
Both the profitability ratios suggest a mixed sentiment for Monster Beverage Corporation (NASDAQ:MNST) and Twitter, Inc. (NYSE:TWTR).
EPS & Surprise Factor
Monster Beverage Corporation (NASDAQ:MNST) reported $0.5/share EPS for the previous quarter where analysts were predicting an EPS to be $0.46/share Thus beating the analyst Estimates with a Surprise Factor of 8.7 Percent. While, Twitter, Inc. (NYSE:TWTR) reported EPS of $0.21/share in the last quarter. The analysts projected EPS of $0.14/share depicting a Surprise of 50 Percent.
Taking a look at Earnings per Share, Twitter, Inc. tends to be beating the analyst estimates more than Monster Beverage Corporation. so TWTR is more profitable than MNST.
Technical Analysis of Monster Beverage Corporation & Twitter, Inc.
Moving average convergence divergence (MACD) shows that Monster Beverage Corporation (NASDAQ:MNST) is on a PRICE RELATIVITY trend While Twitter, Inc. (NYSE:TWTR) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Monster Beverage Corporation was in BULLISH territory and Twitter, Inc. was in BULLISH territory.
MNST’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While TWTR’s candle is BEARISH with HIGH.
EPS Growth Rate: MNST’s 16.98% versus TWTR’s 43.3%
Another shareholder value can be analyzed through the EPS growth rate; the next 5 years EPS growth rate is predicted by the analysts after the analyzing the previous trends. The next 5 year EPS growth rate of Monster Beverage Corporation (NASDAQ:MNST) is predicted at 16.98% while Twitter, Inc. (NYSE:TWTR) stands at 43.3%. These numbers suggest that TWTR is more suitable investment in terms of EPS growth rate.
Financial Risk and Liquidity Concerns
The current ratio and the debt ratio are the two ratios that show the investor how quickly the company is able to payout its debt and how quickly it can cover its obligations. The current ratio of MNST stands at 3 while TWTR is at 4.6 whereas the debt ratio of the prior is 0 while the debt ratio of the later is 0.42.
The values of the both ratios suggest that TWTR is more suitable investment when the liquidity and risk is the main concern.
While making an investment, another main factor to consider before investing is the analyst recommendation on the scale of 1 to 5 where 1 is strong buy, 2 is buy, 3 is hold, 4 is Sell and 5 is strong sell. Analyst recommend 2.1 for MNST and 2.8 for TWTR which means MNST has Hold rating whereas TWTR has Hold rating.
Another recommendation of analyst that is to be considered worthy is the price target. The mare price or price trend does not suggest the suitability of a stock. The price target set by analyst is also to be considered while investing as it suggests to what extent the stock will rise or fall in the near future. The price target set for MNST is $65.41 which is 17.23% of its current price while TWTR has price target of 34.45 which is 0.78% of its current price.
Valuation is the process of determining the company’s worth for an investor, the valuation ratios give an insight to that worthiness.
MNST currently has price to earning P/E ratio of 32.71 whereas TWTR has 18.73 while the forward P/E ratio for the prior stands at 27.36 and for the later it depicts the value of 39.02.
The price to Book P/B for MNST is 8.41, Price to Sale is at 8.39 and for TWTR these ratios stand at 4.01 and 9.17.