600% Rise In Shares Of Beyond Meat Since IPO

The share price of the vegan meat making startup Beyond Meat continued to grow and break new grounds at the stock market after the company reported better than quarterly earnings for its first quarter ever as a public company last week. This performance of the stocks made it the best performing company in terms of the rise in stock prices compared to its initial public offering.

On Monday, there was a jump of as much as 34.5 per cent in the stock price of the California-based company and reached a record high of $186.43 but later gave up the advances to settle at a 23 per cent high at pixel time.

A gain of 645 per cent compared to its $25 IPO price on May 1 would be booked by the company’s stock at its session high. This sudden and dramatic increase in its stock price helped the company to increase its market capitalization dramatically to reach a total value of about $11.2 billion which put its market value more than companies such as Macy’s, Whirlpool, Xerox, Harley-Davidson and TripAdvisor.

The spike in the share of Beyond Meat on Monday came after the announcement of its first quarterly earnings results last week where in the company said that the company is on course to achieve net revenues to increase more than 140 per cent year-on-year at more than $210 million for the entire of 2019 which is much higher than the expectations of analysts.

“Beyond’s results and outlook revealed strong underlying business momentum across retail and food service channels and healthy gross margin leverage,” said Adam Samuelson an analyst at Goldman Sachs on Friday following the company’s results.

According to Bloomberg data, the stocks of Beyond Meat currently has 2 “buy” ratings, 7 “hold” ratings and zero “sell” ratings on Wall Street.

The performance Beyond Meat at the stock market is in sharp contrast to some other tech and other companies that have got themselves listed publicly and launched IPOs this tear which includes names such as the US ride-hailing companies Uber and Lyft – the stocks of the companies were down 3 and 18 per cent respectively in comparison to the stocks at IPO launch. Scrapbooking site Pinterest shares are up 50 per cent since its listing.

Buoyed by the growing appetite for vegan based protein from consumers who seek healthier and more environmentally responsible alternatives to meat, investors and Wall Street experts have been very bullish on the future prospects of Beyond Meat. There is a section of analysts who predict that the global market for vegan and plant based meat market in the next 15 years could reach a total of as much as $100 billion.

But there is increasing competition in the alternative meat market with a distribution deal with Burger King being struck by Impossible Foods and meat-free burgers being launched by the packaged goods company Nestlé.

According to analysts, October 29 when the 180-day lock-up period expires and more shares hit the market could be the test for the meteoric rise of Beyond Meat.

(Adapted from FT.com)

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Categories: Economy & Finance, Strategy, Sustainability, Uncategorized

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