Beyond Meat Inc: Up 676% Already, More to Come?

Beyond Meat Inc: Up 676% Already, More to Come?
iStock.com/wildpixel

Will the Rally Continue in BYND Stock?

Whether you like the taste of Beyond Meat Inc’s (NASDAQ:BYND) products or not (I’m personally not a fan), you can’t argue with the fact that the company has delivered enormous returns to investors.

Having completed its initial public offering (IPO) on May 2, 2019, Beyond Meat is a relatively new player in the stock market. Its IPO price was set at $25.00, but not many people managed to acquire the company’s shares this cheap. That’s because on the first day of trading, BYND stock skyrocketed 163% to close at $65.75 per share.

Usually, when a stock has such an impressive first day pop, it would experience some pullbacks as time passed. But that hasn’t really been the case at this plant-based meat substitutes company; after its astonishing debut, BYND stock’s uptrend continued. While there were days where it was in the red, Beyond Meat stock now trades at $194.20 apiece, marking a gain of over 676% from its IPO price. This also means Beyond Meat is by far the best-performing IPO so far this year.

Beyond Meat Inc (NASDAQ:BYND) Stock Chart

Advertisement

Chart courtesy of StockCharts.com

The latest surge came on Monday, July 22, where BYND stock closed with a 9.9% gain. A main factor behind the increased investor enthusiasm recently could be the company’s upcoming earnings report.

You see, earnings season is in full swing, and Beyond Meat stock is scheduled to report second-quarter 2019 (which ended June 29, 2019) financial results on Monday, July 29 after the bell. While we don’t know how what the numbers will be, exactly, we do know that last time it reported, shares soared.

Beyond Meat Inc reported first quarter (which ended March 30) 2019 results on June 6, 2019. For the quarter, the company’s revenue grew a staggering 215% year-over-year to $40.2 million. Adjusted net loss came in at $0.14 per share, slightly wider than the $0.13 per share adjusted net loss incurred in the year-ago period. (Source: “Beyond Meat Reports First Quarter 2019 Financial Results,” Beyond Meat Inc, June 6, 2019.)

The results turned out to be better than Wall Street’s expectations. On average, analysts expected the company to report a net loss of $0.15 per share on $39.0 million of revenue. In the after-hours trading following that earnings report, Beyond Meat stock shot up by as much as 20%.

Given the company’s recent share price performance, it shouldn’t come as a surprise that expectations are high this time around. For the second quarter, Wall Street expects a solid sequential increase in Beyond Meat’s revenue to $52.71 million. At the same time, net loss is expected to narrow from the first quarter to just $0.08 per share. (Source: “Beyond Meat, Inc. (BYND),” Yahoo! Finance, last accessed July 22, 2019.)

Analyst Take

If Beyond Meat Inc delivers another top- and bottom-line beat in the upcoming quarterly report, it could give investors a reason to continue liking its shares. over the long term, however, the fate of BYND stock will likely depend on how well the company capitalizes on the booming plant-based meat substitutes industry.

According to a recent report from Barclays PLC, factors such as climate change, animal welfare concerns, and increased interest in wellness would help grow the alternative meat market to $140.0 billion over the next decade. (Source: “3 factors are driving the plant-based ‘meat’ revolution as analysts predict companies like Beyond Meat and Impossible Foods could explode into a $140 billion industry,” Business Insider, May 24, 2019.)

Beyond Meat Inc is already one of the major players in the alternative meat industry. If the company can maintain its market share going forward, it would be running a billion-dollar business once the market reaches the size predicted by Barclays.

And that’s how BYND stock might be able to stay on its uptrend for 2019 and beyond.