The company’s shares nosedived after being downgraded…
Beyond Meat’s stock has been on fire since its May IPO. On Monday, the company’s shares closed at $168.10 per share, which is substantially higher than its IPO price of $25 per share.
But Beyond Meat experienced its first dose of reality on Tuesday after JP Morgan downgraded the company. This is somewhat surprising, given that the firm was the lead underwriter for Beyond Meat during its IPO.
Analyst Ken Goldman told clients that the stock is “beyond our price target” of $120 per share and downgraded it from neutral to overweight. The company’s shares fell 11% in premarket trading on Tuesday.
Is the future meat-free?
In spite of this temporary setback, things still look pretty good for Beyond Meat. Last week, the company delivered its first quarterly earnings report which beat investor expectations on almost every level.
Beyond Meat seems to have an incredible amount of momentum behind it. The company is part of a disruptive and highly in-demand industry.
Vegetarian products are quickly becoming mainstream and even meat eaters are interested in finding ways to reduce their intake. Consumers want alternative meat products that are healthy and reduce their environmental footprint.
The proof of this lies in the company’s earnings report. The company’s first-quarter sales exceed $40 million, which is up 215% from a year earlier. This shows that Beyond Meat has increased demand from both new and current customers.
Beyond Meat’s products are available in major grocery stores and certain restaurant chains like Tim Hortons. The company also announced it is launching a new version of its “Beyond Burger” which should be available in stores by the end of the month.
Final thoughts
The future looks promising for the meat-free industry but Beyond Meat is far from the only player. Impossible Foods is one of its biggest competitors and its products are offered in major restaurant chains like Burger King and the Cheesecake Factory.
Plus, major suppliers like Tyson and Nestle are planning to start offering plant-based meats. So Beyond Meat will need to find a way to differentiate itself and find a competitive edge in the market.
Have you tried any Beyond Meat products? What do you think? Leave a comment below.
