SAN FRANCISCO (Reuters) – American consumers hankering for one of Beyond Meat's faux-meat burgers can pick up one in the grocery store for about $ 3 a patty.
Utated handout picture of a Beyond Burger. Beyond Meat / Delivery via REUTERS
It's a fraction of what they're going on on Wall Street, where investors who want to get food producer's sizzling stock seem to be equivalent to more than $ 50 a burger.
Nails down how much Beyond Meat is worth, is one of the hottest topics on Wall Street after an almost 500% increase in inventory since the first public offering on May 2.
The company has attracted investors by investing in becoming the dominant player in the growing market for plant-based hamburgers, sausages and other meat alternatives, even though the company has not yet had a profit.
With ground meat sales in grocery stores for the equivalent of $ 1
At nearly $ 9 billion, Beyond Meat's market capital competes with several mature food companies. Poultry producer Pilgrim's Pride checks in at $ 6 billion, for example while Campbell Soup Co. has a $ 12 billion stock market.
So far, the Wall Street establishment does not see the price as justified. The eight analysts covering the stock have pricing targets from 11% to 46% below Beyond Meat's current share price of around $ 144, following the recent rally.
Preferred Valuation Measurements, such as the Price Earnings Ratio, are not useful because Beyond Meat loses money and it is unlikely to record a profit for at least a year or so.
At the same time, the stock trades at 38 times this year's Wall Street revenue estimates, making it more expensive based on it than a handful of US stocks, even though it faces competition from major and profitable rivals, including Nestle, the world's largest packed food group. .
PATTIER PER PART?
Beyond Meat increases sales of Beyond Sausage and other products, but Beyond Burger is still a flagship offer.
The company sold £ 15.2 million of food last year, equivalent to 61.0 million 4-ounce patties, the weight of Beyond Burger sold in supermarkets. It puts the company's current market value of $ 143 per Beyond Burger patty sold last year.
On average, analysts expect Beyond Meat's revenue to grow 152% this year to $ 221 million, according to Refinitiv. Conservatively assuming no price increases, it would be on track to sell 153 million patties in 2019, making its current stock market value equivalent to $ 57 per 4 ounce patty sold in 2019.
A Beyond Meat spokesman refused to give details on Sale of specific products or the weight of their burgers sold through restaurants.
While investors generally do not value companies by comparing stock prices to unit sales, the high price they pay – at least in the case of burger patties – owning a stake in Beyond the future of the meat signifies a high-value valuation, even as the competition grows.
Impossible Foods has started selling its impossible burgers through restaurants such as Burger King, Red Robin and Applebee. Meat processor Tyson Foods today launched its first vegetarian and mixed protein products, including a beef and pea burger. Nestle and Canada's Maple Leaf Foods Inc launch their own competing patties and vegan "steak" in the coming months.
"I would never bet on America's love affair with burgers," said Bob Goldin, a partner of the consulting firm Pentallect for the food industry. "Although they spread out 1 or 2% of the market, it's big business. But competition comes."
Reporting Noel Randewich, Editing by Rosalba O & B; Brien