Is Beyond Meat On Your Watchlist?
Beyond Meat’s (BYND Stock Report) stock is on a tear. This came after BTIG analyst, Peter Saleh gave a buy rating for the plant-based meat alternative and a price target of $173. This is a bullish call for prospective investors. When investors are diving into one particular stock, it would be great to look at the potentials it has. Personally, I want to have a look at the fundamentals before deciding to invest. That’s what we might want to do with BYND stock. While Beyond Meat shows great growth this quarter, many fail to see the scalability of the business.
As Al Root at Barron’s put it, “The stock always reacts to news flow more than company fundamentals. That is something bullish and bearish investors should take note of.”
The company is well positioned in one of the fastest growing sectors today. The plant-based meat industry has grown dramatically over the past few years. Of course, the COVID-19 pandemic has only driven greater attention on the vulnerabilities of the meat supply chain. The good thing is that consumers are now increasingly recognizing the value of meat alternatives. With so much news flow going on around Beyond Meat, could BYND stock be set for another rally soon?
Jim Cramer: Plant-based Meat Movement Is Happening
The plant-based meat company went on to deliver strong Q1 results on May 5, with revenue surging 141% year over year to $97.1 million. The gains came despite thousands of restaurants being forced to shut down during the COVID-19 pandemic. Better yet, BYND is becoming more profitable as the business scales up its operations. This is from its improvement in gross margin in the first quarter to 38.8%, up from 26.8% the year before.
As meat-packing plants struggle with coronavirus outbreak, Beyond Meat took advantage of the situation in gaining market share by cutting prices and introducing the healthier alternative to consumers. After all, getting the tastiest and least expensive burger is no longer the priority for many. Investors know that, and they put their money into where it matters most for survival amid the pandemic.
Apart from the BTIG analyst, CNBC’s Jim Cramer is also a strong advocate for Beyond Meat too, rating it a buy. As Jim puts it, “you’ve got to get on the bus or… get left behind. It’s about saving the earth from pandemics, it’s about disrupting the way we get protein, and it’s about the end of the breeding and slaughtering of industrial cows because the whole thing is bad for the earth,” Cramer added.
Beyond Meat Leading The Change In The Industry
A lot has happened in a year for the plant-based meat industry, and not just for Beyond Meat alone. This came as plant-based meat jumped straight into the mainstream market, as companies partner with multinational fast food chains and independent restaurants.
Fast-food chains are planting the seeds of change for those who prefer meat-free diets. Many fast-food chains are conducting trials to serve plant-based food to their patrons. We could expect to see a major shift in eating habits across the globe, especially after the pandemic.
Read More
- Teladoc Health (TDOC): Is It Too Late For Virtual Health Care Stocks?
- Why JD.com (JD) May Be A Better Buy Than Alibaba (BABA)?
Strong Partnership Signals Opportunities For BYND Stock
Beyond Meat’s partnerships with fast food chains including Starbucks (SBUX Stock Report), Dunkin (DNKN Stock Report) and potentially McDonald’s (MCD Stock Report) would quickly elevate the brand to an international scale. As more consumers are showing their acceptance towards plant-based meats, could this change in behavior present another opportunity for prospective BYND stock investors?
BYND Stock: An Overperformer
Unlike other meat producers, Beyond Meat is expecting some big growth this year. BYND stock has been on the move since mid-March. At the time, shares traded around $54. But look at where the stock is trading now. Yet, it is still some way for BYND stock to reach its all time high of $235 per share. Investors shouldn’t be surprised if we are back to that level again.
Prior to the pandemic, Beyond Meat was viewed as an alternative, a healthier source of diet. But now with the disruption in meat supply, people are rushing to stock up on plant-based products. The significant demand for plant-based meat substitute might create a bullish momentum that investors would love to have. We have yet to be able to quantify how much BYND will benefit from such disruption. The company could be positioned to experience further gains, as long as meat shortages continue to be a concern. BTIG’s price target envisions a significant upside of 26% from its current $136.2 level.
What’s Next?
No doubt the plant-based meat sector will continue to evolve dramatically, especially during this pandemic. With the demand for plant-based meat expected to increase over time, is BYND stock a value buy now? Comment below and let us know what you think.
