Beyond Meat’s 163% Post-IPO Bounce Best US Stock Market Debut Since 2000
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Beyond Meat now stands as the most successful market debut raising at least $200 million
Backed and promoted by a clutch of celebrities such as
Numerous blind taste tests have seen tasters rank Beyond Meat patties and sausage meat ahead of actual meat alternatives. The company
Investors are, however, still making a leap of faith by investing in Beyond Meat at its current valuation. The company is still loss making and now faces the challenge of international expansion and coming up with products that will work in other parts of the world where burgers and sausages aren’t as popular as in North America. However, Beyond Meat has tapped into a quickly growing market. U.S. supermarket sales of meat alternatives grew almost 20% over the year ending January 5th according to market researchers Nielsen. As well as supermarket sales, Beyond Meat’s burgers are offered by several major restaurant chains, including TGI Fridays.
Beyond Meat does seem to have a clear path to profitability. The company has doubled its revenues in each of the past two years and last year losses were $29.9 million on revenue of $87.9 million compared to a loss of $30.4 million on $32.6 million revenue over 2017. Revenues could have been significantly higher last year were it not for severe shortages in supply. Beyond Meat will invest its IPO windfall in beefing up, pardon the pun, its production capacity, supply chain and international expansion.
The potential of the latest technology in the world of faux meat is demonstrated by the fact that one of Beyond Meat’s biggest early investors was Tyson Foods, the U.S.’s biggest meat producer. The company has, however, since sold its 6.5% stake, which could be considered a strange move on the presumption its initial investment was hedging its bets on a new challenge to its core market.
The success of Beyond Meat’s market debut raises inevitable questions around whether the company didn’t undervalue its IPO. However, if investors are to see sustainable long term returns, Beyond Meat’s work starts now. The food tech start-up has had a great beginning to life as a public company. Now it has to turn that optimism into a serious, international business. If it manages to do so both investors and the planet stand to gain.
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