Beyond Meat Continues Giddy Share Price Rise On First Results
Already one of the most successful IPOs of all time having seen its share price gain 298% since its starting value on May 1st, vegan meat alternative company Beyond Meat yesterday added a further 25% to breeze through the 300% barrier. The latest leap in the company’s value came after it made its first ever quarterly trading update as a publically listed company. Beyond Meat’s shares have risen to over $117 in afterhours trading, having been sold for $25 during the IPO.
The latest share price surge has been catalysed by the company, which produces plant-based burgers that look, smell and taste like real beef even ‘bleeding’ beetroot juice, telling analysts they may want to upwardly revise their y-o-y revenue forecasts. Net revenues are now on target to reach $210 million for 2019, which would represent growth of over 140%. Analysts had forecast $205 million. Not an out-of-the-ordinary leap but enough to keep the feel-good factor around the stock bubbling over.
Q1 was strong with revenues tripling to $40.2 million ahead of expectations for $38.9 million. The Beyond Meat burger, made of yellow pea protein and vegetable starches as well as beetroot juice for the ‘blood’ effect was by far the company’s biggest seller. It also offers vegan sausages.
Sales growth has been driven by existing customers upping their orders as well as Beyond Meat further developing new buyers by expanding its base of retail and restaurant partners. A European production plant is planned and work has already started on the Netherlands-based plant.
Rapid expansion has, however, led to growing losses, which reached $6.6 million from $5.7 million over the same period a year ago. They were, though, down on a per share basis at 95 cents compared to 98 cents over the same quarter of 2017. Losses per share adjusted for one-off expenses were slightly lower than forecast at 14 cents a share when 15 cents had been pencilled in by analysts.
A wider market trend towards growing demand for meat substitutes is providing wind for Beyond Meat’s sails, with some analysts tipping it to reach an overall value of $100 billion by within 15 years. Beyond Meat won’t have that market to itself though and competition is growing. Californian peer Impossible Foods, still privately owned but heavily funded is Beyond Meat’s most direct competitor and Nestle have also recently released their own vegan burger alternative.
Food science developments mean this new generation of faux burgers is much closer to the real thing in taste and overall experience compared to previous examples on the market. Other start-ups are working on ‘lab grown’ meat, which involves real meat and fish fillet slabs being ‘grown’ in a laboratory environment from small cultures of cells. However, it is thought that it will be another 5-10 years before these products achieve commercial viability.
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