An early Beyond Meat investor explains why he’s long on the stock
Beyond Meat made its first quarterly profit, but investors weren’t impressed.
While the company’s earnings and sales exceeded analysts’ forecasts, Beyond Meat shares fell 7% after the close of trading on Monday. The stock debuted on Wall Street in May at $ 25 a share and soared to nearly $ 240 before returning to its current price of around $ 100. That’s four times the company’s original IPO price, but many skeptics believe Beyond Meat’s stock is grossly overvalued..
Beyond Meat reported strong quarterly results. Sales are up 250% year-over-year to $ 92 million and the company has net income of $ 4.1 million, up from a loss of $ 9.3 million a year ago..
CEO Ethan Brown said the company «will continue to focus on expanding its distribution presence both domestically and internationally, building a brand, bringing new, innovative products to market and strengthening our infrastructure and internal capabilities to support our future growth».
The company continued to expand its restaurant partnerships. McDonald&# 39; s, Kum Yum Brands and Subway have announced test trials in the third quarter. Ethan Brown told analysts about his expectations that the McDonald test&# 39; s will lead to continued work with the fast food giant.
Beyond Meat competes for distribution agreements with major food retailers Walmart, Target and Sprouts, as well as partnership with restaurants Dunkin, Denny&# 39; s and Del Taco.
Brown addressed the growing competition during a conference call. He told analysts that it would be «naively» expect only one or two companies in the alternative meat industry, and that Beyond has been preparing to compete for years. Brown compared the situation to Amazon’s competition with retailers, saying the emergence of large competitors would not break Beyond’s business..
Their rival private company Impossible Foods has arguably the most popular plant-based product, thanks to its deal with Burger King – the Impossible Whopper. The company also began shipping its products to grocery stores. Burger King Restaurant Brands announced earlier Monday that its US offices are experiencing the strongest growth in sales in four years, thanks in part to the Impossible Whopper..
Brown said Beyond is trying to become a global company. Recent employees such as Coca-Cola veteran and new CMO Stuart Kronauge and former Tesla CEO and current Beyond COO Sanjay Shah are demonstrating their commitment to this goal..
Beyond also raised its 2019 earnings forecast. Revenues are currently expected to be between $ 265 million and $ 275 million, up from the previous forecast of over $ 240 million. The company also expects adjusted earnings before interest, taxes, depreciation and amortization of $ 20 million for the 2019 financial year..
Large food companies are in a rush to quickly capture growing market share.
Nestle recently unveiled its Awesome Burger widely, while grain giant Kellogg now offers a plant-based Incogmeato brand..