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MarketScreener Homepage  >  Equities  >  Nasdaq  >  Beyond Meat Inc    BYND

BEYOND MEAT INC

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What is a Beyond Meat burger worth to hungry investors?

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06/25/2019 | 02:52pm EDT
Products from Beyond Meat Inc, the vegan burger maker, are shown for sale at a market in Encinitas, California

SAN FRANCISCO (Reuters) - U.S. consumers hankering for one of Beyond Meat Inc's faux-meat burgers can pick one up at the grocery store for about $3 a patty.

That is a fraction of what they are going for on Wall Street, where investors looking to get a serving of the food producer's sizzling stock appear to be laying down the equivalent of more than $50 a burger.

Nailing down just how much Beyond Meat is worth is one of the hottest topics on Wall Street following a nearly 500% surge in its stock since its initial public offering on May 2.

The company has attracted investors betting it will become the dominant player in the nascent market for plant-based hamburgers, sausages and other meat alternatives, even though the company has yet to turn a profit.

With ground beef retailing in grocery stores for the equivalent of $1 or less per 4-ounce (113 gram) burger patty, according to the U.S. Department of Agriculture, Beyond Meat's early success in grocery store meat sections shows a market exists for premium-priced burger products made with or without animal.

At nearly $9 billion (£7.09 billion), Beyond Meat's market capitalisation rivals several mature food companies. Poultry producer Pilgrim's Pride checks in at $6 billion, for instance, while Campbell Soup Co sports a stock market value of $12 billion.

So far, the Wall Street establishment does not see that price tag as justified. The eight analysts covering the stock have price targets ranging from 11% to 46% below Beyond Meat's current share price of around $144, following its recent rally.

Preferred valuation measures like the price to earnings ratio are not useful because Beyond Meat is losing money and is unlikely to record a profit for at least another year or so.

Meanwhile, the stock is trading at 38 times this year's Wall Street revenue estimate, making it more expensive on that basis than all but a handful of U.S. stocks even as it faces competition from larger, profitable rivals including Nestle, the world's largest packaged foods group.


Graphic: Beyond Meat's burger multiple

PATTIES PER SHARE?

Beyond Meat is increasing sales of its Beyond Sausage and other products, but the Beyond Burger remains its flagship offering.

The company sold 15.2 million pounds of food last year, equivalent to 61.0 million 4-ounce patties, the weight of the Beyond Burger sold in supermarkets. That puts the company's current market capitalization at the equivalent of $143 per Beyond Burger patty sold last year.

Analysts on average expect Beyond Meat's revenue to surge 152% this year to $221 million, according to Refinitiv.

Conservatively assuming no price increases, it would be on track to sell 153 million patties in 2019, making its current stock market value equivalent to $57 per 4-ounce patty sold in 2019.

A Beyond Meat spokesperson declined to give details on sales of specific products or the weight of its burgers sold through restaurants.

While investors do not typically value companies by comparing stock prices to unit sales, the high price they are paying - at least in terms of burger patties - to own a stake in Beyond Meat's future signals a lofty valuation, even as competition grows.

Impossible Foods has started selling its Impossible Burgers through restaurants including Burger King, Red Robin and Applebee's. Meat processor Tyson Foods this month launched its first vegetarian and mixed-protein products, including a beef and pea burger. Nestle and Canada's Maple Leaf Foods Inc are launching their own competing patties and vegan "ground beef" in coming months.

"I would never bet against America's love affair with burgers," said Bob Goldin, a partner at food industry consulting company Pentallect. "Even if they chip off 1 or 2% of the market it's big business. But competition is coming."

(Reporting by Noel Randewich, Editing by Rosalba O'Brien)

By Noel Randewich

Stocks mentioned in the article
ChangeLast1st jan.
BEYOND MEAT INC 3.36% 172.8504 Delayed Quote.0.00%
FEEDER CATTLE?FUTURES (GF) - CMG (ELECTRONIC)/C1 -0.05% 141.575 End-of-day quote.-4.87%
LIVE CATTLE (LE) - CMG (ELECTRONIC)/C1 -0.02% 108.475 End-of-day quote.-13.08%
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Financials (USD)
Sales 2019 224 M
EBIT 2019 -12,1 M
Net income 2019 -16,1 M
Finance 2019 232 M
Yield 2019 -
P/E ratio 2019 -595x
P/E ratio 2020 -11 102x
EV / Sales2019 43,7x
EV / Sales2020 27,1x
Capitalization 10 012 M
Chart BEYOND MEAT INC
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Technical analysis trends BEYOND MEAT INC
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TrendsBullishBullishNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus HOLD
Number of Analysts 8
Average target price 116,43  $
Last Close Price 166,53  $
Spread / Highest target 2,08%
Spread / Average Target -30,1%
Spread / Lowest Target -54,4%
EPS Revisions
Managers
NameTitle
Ethan Walden Brown President, Chief Executive Officer & Director
Seth Goldman Executive Chairman
Stephanie Pullings Hart Senior Vice President-Operations
Mark Joseph Nelson Chief Financial Officer, Treasurer & Secretary
Raymond J. Lane Independent Director
Sector and Competitors
1st jan.Capitalization (M$)
BEYOND MEAT INC0.00%10 473
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MONDELEZ INTERNATIONAL36.65%78 691
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THE KRAFT HEINZ COMPANY-28.72%37 391
GENERAL MILLS37.24%32 241