Beyond Meat (NASDAQ:BYND), a company that has had beyond fantasy run following its initial public offering earlier this year, reported Q2 earnings today. According to the company, operations generated revenues of $67.3 million, an increase of 287%, and a net loss of $9.4 million or a loss of $0.24/share. As it emerged that Beyond Meat will pursue a secondary offering of shares, which will boost their float and dilute existing shareholders, the price of the shares took a bit of a dive.
What Beyond Meat maintains is a whopper of a valuation as the market cap stands at over $13 billion. The company went public at a valuation of $1.5 billion at $25/share.
So is Beyond Meats valuation justified? Well, that depends if you can see into the future.
Beyond Meat is a red hot stock right now as popular interest and retail demand for its plant-based meat replacement product have captured the interest of the masses. Restaurants are rapidly updating menus and grocery stores are adding Beyond Meat to their limited shelves.
Beyond Meat’s President and CEO, Ethan Brown, said they were pleased with the Q2 results as the number reflects strength across their business:
“We believe our positive momentum continues to demonstrate mainstream consumers’ growing desire for plant-based meat products both domestically and abroad. Looking ahead, we will continue to prioritize efforts to increase our brand awareness, expand our distribution channels, launch new innovative products, and invest in our infrastructure and internal capabilities in order to deliver against the robust demand we are seeing across our business.”
While I cannot quickly remember a food product garnering such excitement on Wall Street you can guarantee that one group of individuals is beyond pleased with the company’s performance. OurCrowd investors who were able to jump the queue and purchase shares prior to the IPO in a crowdfunding round. A home run like Beyond Meat can make a fund or VCs year. The same may hold true for OurCrowd.
Of course, markets are fickle and shares can move quickly in the other direction. The lock up period for early investors will expire at some point in the coming months. This may release a flood of Beyond Meat shares impacting the price. But then at the current share price, one must wonder if some early investors are already hedging bets by selling shares short or buying puts (depending on shareholder agreements). Whatever each investor decides, the gains so far have been beyond spectacular.
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