Daily Management Review

Beyond Meat Beat Expectations In Its First Quarterly Report Since IPO In May


Beyond Meat Beat Expectations In Its First Quarterly Report Since IPO In May
Beyond Meat – the United States based alternative meat company fared well in its first quarterly earnings reporting since it went public with a much talked about IPO in May this year. The company comfortably beat Wall Street estimates and saw its stocks go up by as much as 20 per cent in after hours trading alone to cross the $100 mark.
Compared to the stock price of the company at the launch of the IPO at $25 per share, the price of a share of Beyond Meat has risen more than 300 per cent which now makes this company that manufacturers began meat products one of the most successful ones in recent years.
There is however criticism of the company for it not being able to turn out a profit ever and some analysts warn that at $5.7 billion, the stock market value of Beyond Meat is potentially unjustified because it lost almost $30 million just last year against revenues generated by it to the tune of $90 million. But such details are being ignored by its investors as is evident from the share price potentially because of the fast improvements in its performance and numbers, say analysts at Renaissance Capital.
In the first quarter, a loss of $6.6 million, or 95 cents per share was reported by the El Segundo, California-based company. In the same period last year, the company had clocked a loss 98 cent per share and hence it has improved its performance year-on-year. Beyond Meat lost 14 cents per share after adjusting for stock-based compensation costs and other items. According to FactSet, that beat estimates of analysts at 15-cent loss.
Year-on-year, the revenue for the current quarter generated by Beyond Meat was three times greater at $40.2 million which was easily more than the estimate of Wall Street at $39 million.
The successful launch of its IPO last month on the Nasdaq shot this ten year old company.  After just the first day of trading, its shares were up 163 per cent and according to Renaissance Capital that was the highest first day jump in stock prices since 2015.
Despite the fact that Beyond Meat, the first alternative meat firm to hit the stock markets, is also set to face a number of competitors from startups as well as established meat industry giants.
Investments in lab-grown meat producer Memphis Meats and Future Meat Technologies have been made by Tyson Foods. Beyond Meat’s closest competitor Impossible Foods has till now chosen not to go public but is set to expand throughout the US in Burger King and has roped in celebrity investors including Serena Williams and Jay-Z which had caught media attention. And as recently as Monday, Nestle' announced release of meatless "Awesome Burger" in the fall under its Sweet Earth brand.
According to analysts, one of the major drivers of the success of Beyond Meat is that it targeted meat lovers instead of focusing on vegans only. The company sent specifications to retailers to keep its products in the meat cooler alongside the likes of T-bone steaks.