Investors Watching Plant-Based Trends Ask: Is Beyond Meat Still a Good Buy?
Between product launches, partnerships, and stock prices, it is safe to say that Beyond Meat has been making headlines all summer. In July and August, Beyond partnered with massive roadside chain Wawa to debut the Wawa's Sizzle breakfast sandwich. By mid-September, they announced a partnership with the biggest grocery stores in the country to provide Italian Style Beyond Meatballs nationwide, including Walmart, and just last week, the company announced that Beyond Breakfast Sausage Links would be available nationwide by the end of October.
Of the latest announcements and releases, Chief Marketing Officer at Beyond Meat, Stuart Kronauge said, "with demand for plant-based breakfast options continuing to rise and more of us eating breakfast at home, we knew the segment was ripe for innovation." He added: "with the launch of Beyond Breakfast Sausage Links, we're thrilled to introduce another better-for-you plant-based meat option to satisfy consumers' love of classic breakfast dishes."
With all the buzz, you’d be smart to wonder whether Beyond is still a good buy. I bought 50 shares of the stock on opening day, April 22nd, 2019, at $46 a share. Now I am wondering whether or not to double down on my bet.
So the question is: Has Beyond’s expectations caught up with reality? Or is the stock overpriced?
According to the NASDAQ, Beyond Meat (BYND) is trading at $190 per share. While the initial evaluation was $25, the ticker beat expectations back when it IPO’d, opening at $46. This means if you had bought 100 shares on opening day for $4,600, you would $14,400 in gains. That's a 313% return.
This is not to say that Beyond hasn't been taking investors on a rollercoaster ride. The record high, set on July 26th, 2019, was $234.90, and the low was $45 on May 2nd back in 2019, as this NASDAQ chart shows. However, from time to time, investors have seen some pretty significant fluctuations. Beyond Meat lost 25.7% of its value in March of 2020. And the stock took another hard fall on June 23rd, dropping 10% after CBC reported McDonald's had no plans to offer Beyond Burgers in the US. Every time there is a news report or even a rumor of Beyond making moves, such as expanding into China or partnering with a major food restaurant company like McDonald's or Dunkin, the stock pops up.
The stock has stood strong in the face of criticism: An article came out in Forbes on October 14th, revealing that Bernstein predicted that Beyond Meat would "underperform" the market. Another piece published on September 14th (also in Forbes) claimed that "competition" would "eat beyond meat alive." Interestingly while these predictions had some negative impact on the price throughout the day, in both instances, the stock value popped back up by market close the following day. The stock is up nearly five points since Bertien's negative comment yesterday, and after the September 14th snafu, the stock closed 10 points higher on September 15th.
In terms of competition, consider that on August 12th Beyond Meat announced a partnership with Aramark. As one of the largest food providers in the US, which is beyond a big deal. Aramark provides food for college campuses, sports arenas, stadiums, concert venues, and more. Which means when the economy fully 'reopens' Beyond Meat will be there. The answer to the question, 'should Beyond Meat be a part of your stock portfolio?' is up to you. Beyond making massive partnerships right and left, you better believe that I will be bulking up on this stock.