Beyond Meat stock price soars ever higher after first earnings report since smashing IPO
- The stock price of Beyond Meat soared more than 18% late Thursday to more than $100 a share after passing its first quarterly earnings test since its IPO.
- The alternative meat company reported first-quarter revenue of $40.2 million, more than triple its number this time last year.
- Experts have criticized the company's stock market value — now at $5.7 billion — considering its small size.
Alternative meat company Beyond Meat faced its first quarterly earnings test Thursday since its eye-popping IPO in May, and the newly public company passed with flying colors. It beat Wall Street expectations and sent its stock price up nearly 20% in after-hours trading to well over $100 a share.
Beyond Meat's stock price is already more than 300% above its May IPO price of $25 per share, making the plant-based meat company the most successful IPO in years.
Skeptics warn that Beyond Meat's stock market value — now at $5.7 billion — is hardly justified given that the startup lost nearly $30 million just last year on nearly $90 million in revenue and has yet to turn a profit. But analysts at Renaissance Capital said investors seem willing to ignore such details because of Beyond Meat's fast-improving numbers.
The El Segundo, California-based company lost $6.6 million, or 95 cents per share, in the first quarter. That's an improvement from losses of 98 cent per share the same period last year. Adjusted for stock-based compensation costs and other items, Beyond Meat lost 14 cents per share, which was better than the 15-cent loss analysts had forecast, according to FactSet.
Beyond Meat reported revenue of $40.2 million, more than triple the prior year. That also beat Wall Street's forecast of $39 million. Shares spiked 19% to $118.50 in after-hours trading.
Increasing competition
Ten-year-old Beyond Meat burst into the spotlight last month with its successful IPO on the Nasdaq. Its $25 opening share price jumped 163% in the first day of trading, the biggest first-day pop since 2015, according to Renaissance Capital.
Beyond Meat is the first alternative meat company to go public, but it has competition nipping at its heels from both buzzy startups and established meat industry stalwarts.
Tyson Foods has invested in Future Meat Technologies and lab-grown meat producer Memphis Meats. Direct competitor Impossible Foods has remained private, for now, but is rolling out nationwide in Burger King and grabbing media attention with celebrity investors including Serena Williams and Jay-Z. And Nestle's announcement Monday that its Sweet Earth brand is releasing a meatless "Awesome Burger" in the fall caused Beyond Meat's stock price to drop 7% in Monday trading.
Can meatless meat be called "meat"?
Part of Beyond Meat's enormous success is that it markets its product to meat lovers, not vegans, specifying to grocers that its products belong in the meat cooler along with the T-bone steaks, as opposed to the freezer section.
Its burgers and sausages are made from pea protein, potato starch and other plant-based ingredients. Its burgers "bleed" with beet juice, and its sausages are colored with fruit juice. It sells to 30,000 grocery stores, restaurants and schools in the U.S., Canada, Italy, the U.K. and Israel.
Its meat-cooler marketing strategy has been contested by some regulators who take issue with Beyond Meat's use of the word "meat" to describe the company or its products. For example, Missouri passed a law last year prohibiting companies from promoting a plant-based product as meat. The measure has since been challenged in a lawsuit by plant-based company Tofurky and an advocacy group called The Good Food Institute.
— The Associated Press contributed to this report.
