In 2019, several companies were thriving well in terms of their IPO, and Beyond Meat was one of them. However, the 2020 pandemic has taken its toll on this company, and its stock value is down over 40%. Yet even with this fall, there is something about this company that draws me to it. Welcome to my blog, home to all things, financial freedom, stock investment, money management, and lifestyle.
Be sure to click the like button, leave a comment, and share this post. If you are new to stock buying, then you might want to read my post ‘Companies Due For A Stock Split In 2020.’ Today we will discuss Beyond Meat and how the good the stock is to have in your portfolio. Note that everything on this blog is my opinion, and all values are accurate for the 17th of August 2020. Let’s begin.
About Beyond Meat
I was never very familiar with this company and its product until recently. Beyond Meat is a company that specializes in producing plant-based meat products. Through the use of propriety science, they have created products that look, feel, and have the consistency of meat without being actual meat. The company recently released its Q2 earnings, and they have done well even with the pandemic.
For the food sector, BYND Meat is one of the best companies out there, and they make you know that through their advertising. The company has been redefining meat through the unique proprietary method, which fits well with the world when everyone is looking to accept more renewable, healthier, and accessible sources. Their products, veggie burgers, meat burgers, and more is one aspect of the company, and there is so much more to them.
Another aspect is their partnership, which breaks their business into four different segments, which are US Retail, US foodservice, International Retail, and; International foodservice. These foods have many benefits they offer, ranging from enhancing human health to affecting positive climate change.
For a company that is facing an audience that is already saturated with age-long food choice, they have done well to create a difference in their vegan foods. What I like about the company is its ability to not just face and surpass a limitation in vegan food but their ability to offer a healthier option to the world.
BYND Meat Partnership
From the perspective of the Retail service, foodservice, and International, they have had many new partners in the recent year. Their partnership and audience extend from both vegan and non-vegan vendors and consumers. All these companies are just those that have come into a partnership within the last one year.
The biggest risk for the company is how well it can give a good first impression. If the vendors and sellers do not make the foods they sell well, people can form a judgment on the product.
BYND Q2 reports highlights
From the summary of the Q2 earnings of the company, the company’s revenue increased by 69% over the year, with margin points dropping at 110bps. The company spent quite a lot on cost within the last year, one of which was their repackaging expense that took over $5 million. They also donated about $1 million to relief campaigns.
The company showed its humane side even when they were not doing their best and even a relatively small company. If you look at their earnings, you see that the company would have done well if not for all these expenses.
So if you are analyzing their earnings for the company year 2020 and 2019, you can say that the company lost more money. But then when you analyze further, you see that if they had not spent on the relief and repackaging, and if the world was not on a massive shut down, they might have done a lot better.
The food service is a healthy industry, and I know that as soon as things get better and the world goes back to normal, Beyond Meat will look at a healthy recovery.
Partnership growth
Their US Retail growth has been successful, they have done well, and with their partnerships, I can say that there is a bright future for them. And they are not relenting, because according to their report they are expected to see over 50% growth in sales. If you drill down into the numbers and analyze their sales growth, you could see that even with a 10-15% drop in sales each year they could see as much as 2-3 billion dollars as yearly sales and revenue by 2025.
Another point is how much they are diversifying and how quickly they are breaking into the international market. I believe that in a few years Beyond Meat could become a household name outside of the USA. More people will open up to them and their products, which will become an excellent revenue for the company.
Their market cap sits at 7.8 billion dollars, and their revenue was over 400 million dollars. Their Price to sales ratio as of the 14th of this month was at 19.52. For now, investors see the profit in this company, and although things are looking shaky, there is still a lot of investors bargaining for a place within Beyond Мeat.
BYND 2025 Projections
Let’s do a little maths here. I said earlier that I foresee about 3 billion in sales profit for the company by 2025. That value is over six times the current sales value of the company. If we are to multiply today’s market cap and the future profit rate, the company will be worth over 46 billion dollars.
I would like to see what their stock will be valued, and we can do the simple calculation this way. Looking at their outstanding shares for the 14th of august, which is at 62.44 Million, if you divide this with the expected market cap for 2025, you have about 737 dollars per share.
Conclusion
These are my assumptions, and anything can happen between now and 2025. But if my assumptions are right, then investors will be with this stock for a long time, the company will see a lot of growth, and the share will remain at its best values. What is your option of the stock, let me know in the comment section? Hit the like and share button to support my work. Thanks for your time.
Recommended books for further reading:
- How to Make Money in Stocks: A Winning System In Good Times And Bad
- How to Day Trade for a Living: A Beginner’s Guide to Trading Tools and Tactics, Money Management, Discipline and Trading Psychology
- A Beginner’s Guide to the Stock Market: Everything You Need to Start Making Money Today
- Rule #1: The Simple Strategy for Successful Investing in Only 15 Minutes a Week
- The Barefoot Investor: The Only Money Guide You’ll Ever Need
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