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Beyond Meat ($BYND) Up 600% Since IPO

Beyond Meat ($BYND) shares moved higher once again Monday morning. The stock persists at higher than expected levels after one of the most successful IPOs of 2018 2019 so far.

The next closest IPO of 2018-2019 has been Zoom Video ($ZM) which is up a mere 185% compared to Beyond Meat’s 600%. For comparison Uber ($Uber) is down 3% while Lyft ($LYFT) is down 18%.

Beyond Meat shares jumped as much as 34% to $186.43 per share on Monday, marking an all-time high for the company that claims to be “The Future of Protein”. Shares for the company closed on Friday at $138.65. The IPO price was $25 per share.

Shares, which began trading publicly May 2, have soared altogether 560%, reaching a market value of approximately $10 billion. This forward price-to-sales ratio of 35 seems unsustainable. Tyson Food, for instance, trades for 0.7 times their sales. Credit Suisse analysts see a price target on Beyond Meat shares of $125 based on the company’s first-quarter report, as well as a 2030 sales estimate of $3.5 billion. Beyond Meat is trading for about twice that 2030 sales estimate.

This surge in share price has predictably attracted short sellers, though they had seen more than $150 million in losses by the time the stock reached more than $100 a share.

Revenue increased 215% to $40.2 million for the El Segundo, California-based company, though it posted a net loss of 14 cents per share. The company predicts its full-year revenue of more than $210 million. At the end of the day, Beyond Meat is a processed food company, a fact that might bring the company’s stock back down to earth.

According to Nielsen, Beyond Meat enjoys just 2% household penetration in the United States. That suggests room to grow for some. But, whether or not the omnivorous American consumer will ditch simple beef or an ultra-processed alternative remains to be seen.

To be sure, the U.S. market certainly isn’t the only one Beyond Meat is looking at. CFO Mark Nelson called Europe and Asia “very significant” markets for Beyond Meat. He noted that Europe already has a “very well-developed market” for plant-based proteins.

“Asia has a desperate need for this,” he said. “So I’m going to be very aggressive in going into those markets, and our team will be as well. … Asia is absolutely a strong part of our strategy.”

The plant-based meat substitutes market is anticipated to reach $22.9 billion by 2023 as more suppliers enter the market, including Big Food corporations like Nestle and Tyson Foods.