Now that Beyond Meat (BYND) has skyrocketed more than 3x since its IPO (now priced at $86, up from $25 at IPO), what do we think? I personally think that valuing this business at 59x * revenue * is a bit ridiculous... very high level rationale below, would like to know what others think.
- Non-tech business with negative earnings and only $88mm of 2018 revenue
- Currently they have very little competition from the well-capitalized players. That is coming. Impossible Foods recently raised another $300mm, and companies like Tyson and Nestle are going to start pumping money into this and they have the size, scale and capital to push their product out to all of their exiting clients
- This business takes physical COGS, is susceptible to input costs, has capacity constraints, distribution constraints, etc. The type of growth that warrants a 60x revenue valuation is challenging, if not impossible.
- There is no true fundamental basis for this massive price increase over the past couple weeks - it is trading on hype. My aunt (who has zero investing experience) asked me at dinner last week what I thought about it and that she wanted to buy some... when I asked her why, she said "because it sounds like a good idea and I had one once and it tastes good!" 'Nuf said.
Thoughts???
Your analysis sucks. This is a trading board not private equity.
I talked to a friend and he asked me where does it trade first day. I said $50. And I thought I was a bit extreme.
This move is beyond common with stocks like these. I wouldn’t be surprised if this trades $300 in 2 months.
I literally can't even comprehend what you are trying to say/point you are trying to prove, but thanks for the insight
Simplistically don’t try shorting it until 4-5 months after ipo. There’s no supply of beyond meat stock. Only issued $200-300 million of equity. VC investors/insiders are allowed to sell after 6 months.
And going early carries a huge risks that the stock becomes unborrowable it costs 800% a year to find a borrow. Stocks in their first 4 months aren’t fundamental securities. I’ve seen so many small issue new ipos trade stupid prices first few months.
59x p/s implies future sales growth, you need to adjust for that
You think fundamentals matter in this market.. ahahaha how cute.
There are people far more qualified than me and with more sound analysis on the forum, but for what its worth... Once my aunt/neighbour/barber/taxi driver/etc start talking about a stock, its a ripe bubble.
This isn't always the case, but folks like that always get in too late so by the time you hear it from them it really is too late.
I can think of more companies than not where the opposite is true. FANG comes to mind.
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