BYND: Is Beyond Meat Stock A Buy Right Now?
May 07 2021 - 7:01AM
Finscreener.org
Shares of meat substitute company Beyond Meat (NASDAQ: BYND)
have taken investors on a wild ride ever since its IPO. Beyond Meat
stock went public almost two years back at a price of $25 per
share. It then touched a record high of $235 per share in July 2019
and is currently trading at $119 at the time of writing. So, for
IPO investors BYND stock has returned close to 400%.
Despite its high volatility Beyond Meat stock is up 19% in the
last year. It has however lost over 5% year to date and is down 50%
from record highs.
As past performance does not matter much to future investors,
let’s take a look to see if the company remains a solid bet right
now.
Beyond Meat - An overview
Beyond Meat is a food company that manufactures, markets, and
sells plant-based meat products in the U.S. and other international
markets. It operates under the Beyond Meat, Beyond Burger, Beyond
Beef, Beyond Sausage, Beyond Breakfast Sausage, Beyond Chicken,
Beyond Fried Chicken, Beyond Meatball, the Caped Steer Logo, Go
Beyond, Eat What You Love, The Cookout Classic, The Future of
Protein, and The Future of Protein Beyond Meat and design
trademarks.
It sells products through groceries, mass merchandisers,
convenience stores, natural retail channels, restaurants, and
foodservice outlets as well via an e-commerce platform.
The transition towards meat-based products will be a key driver
for Beyond Meat’s top-line growth in the upcoming decade. The
household penetration rates for the Beyond Meat brand in the U.S.
have increased to 5.3% in 2020, a year over year rise of two
percentage points.
While Beyond Meat has fewer SKUs (stock-keeping units) compared
to competitors, its buyer rates have risen by 66% year over year in
the last year. Further, the purchase frequency was up 39% while the
repeat rate increased to 55.3% compared to 43.4% in 2019.
In its annual report Beyond Meat explained, “In other words, in
2020 we saw more US households buying our products, they were
buying them more frequently, and, on average, they were spending
more per household on our products.”
Revenue growth remains strong
Beyond Meat owns the top-selling SKU in all plant-based meat in
the U.S. and accounted for a 19% market share in 2020, an increase
of 450 basis points year over year. This has allowed the company to
increase the top-line at a stellar pace.
In 2020, Beyond Meat reported revenue of $406.75 million
compared to $297.8 million in 2019. The company’s sales stood at
just over $16 million back in 2016. Now Wall
Street expects BYND sales to grow by 41% year over year to $573
million in 2021 and by 51% to $865 million in 2022.
While still unprofitable, Beyond Meat is forecast to improve its
bottom-line from a loss per share of $0.60 to earnings of $0.08 in
2022.
What next for BYND stock and investors?
BYND’s revenue growth decelerated amid the pandemic but it
should recover in 2021 as economies reopen all over the world. In
the December quarter, the company announced two new alliances with
McDonald’s (NYSE:
MCD) and Yum! Brands (NYSE: YUM)
(the owner of fast-food chains including Taco Bell, Pizza Hut, and
KFC) as investors continue to remain excited about Beyond Meat’s
long-term growth potential that will arise from these
partnerships.
Beyond Meat products are already available in 80 countries and
in 122,000 retail outlets in Europe. The company is now looking to
aggressively expand the reach of its meat-based substitutes to
other international markets.
In terms of valuation, BYND stock is trading at a forward price
to sales multiple of 13.1x which is reasonable compared to its
estimated growth rates. It
remains a top bet given Beyond Meat’s leadership position,
strong brand recognition, improving bottom-line, aggressive
expansion plans, and a rapidly expanding addressable market.
McDonalds (NYSE:MCD)
Historical Stock Chart
From Aug 2024 to Sep 2024
McDonalds (NYSE:MCD)
Historical Stock Chart
From Sep 2023 to Sep 2024