Beyond Meat (NASDAQ: BYND) presents an uncompromisingly tasty alternative to meat. Containing similar nutrients and calories with none of the cholesterol, the Beyond Meat Burger is a fantastic revolution in the food industry. In fact, the market has seen the expansion of multiple start-ups across the world producing their own versions of plant-based meat products. The meatless revolution can no longer be considered a fad and there are many reasons to feel optimistic about Beyond Meat stock.
1. Growing Revenue
Plant-based meat alternatives have surged in popularity over the last year. The market itself is expected to rise to $240 billion by 2040 as more and more people look for healthier, greener alternatives to their daily meat consumption. Since Beyond Meat’s IPO, its share price has quadrupled and is currently sitting around the $80 mark. A few pessimistic naysayers might state that the stock is overvalued but Beyond Meat predicts that its net income for 2020 will be somewhere between $490 – $510 million, around a 70% increase from last year.
In its last quarterly earnings, Beyond Meat reported a fiscal fourth-quarter net loss of $0.5 million, or $0,01 per share. However, this loss can be summarized as a natural consequence of restructuring for an international market and thus higher administration costs. Despite this, its annual revenue grew 239% last year and with a purpose-built factory opening in the Netherlands later in 2020, its international markets will incur less cost in the long run.
With less carbon emissions, zero animal products and zero cholesterol to boot, this is the food innovation that the world needs and consumers are definitely responding well.
2. Big Partnerships
One major breakthrough that Beyond Meat saw in 2019 was a 51% increase in its restaurant sales. This is owed to the big partnership deals that Beyond Meat has brought in with McDonald’s (NYSE: MCD), KFC — owned by Yum Brands (NYSE: YUM) — Starbucks (NYSE: SBUX), and Dunkin Donuts (NASDAQ: DNKN). In fact, restaurant sales have been an extremely important source of income whilst the company made moves to expand internationally. Yet, with the effects of the coronavirus hitting the restaurant industry it could spell hard times for this plant-based meat company.
However, investors should be happy to know that Beyond Meat hasn’t put all its eggs in one basket. It has become increasingly more available in supermarkets in the U.S. and Europe. Amazon-owned (NASDAQ: AMZN) Whole Foods helped launch the company back in 2013 and today the likes of Walmart (NYSE: WMT), Target (NYSE: TGT) and Safeway (NYSE: SWY) have all partnered up with Beyond Meat. It is safe to assume that it won’t have a problem ‘meating’ demand until restaurants are back up and running.
Having such big brand names will help reel in curious consumers, and in particular, curious meat-eaters. And trust me, once you try one of their burgers you will be pleasantly surprised by how much it tastes just like meat.
3. Rising up
Fake Meat as a whole is on the rise as consumers are beginning to look for healthier and greener alternatives. Even the recent coronavirus scare could potentially encourage people to look at reducing their meat intake. Beyond Meat is aiming to expand into Asia by the end of 2020 whilst China has begun looking into reducing the reliance its population has on animal-based protein in light of the pandemic. This could present an optimistic looking future for Beyond Meat in Asia.
Along with the rise in fake-meat popularity, there must also be a rise in competitors. Impossible Foods has drawn interest from big named partners such as Burger King — who are owned by Restaurant Brands International (NYSE: QSR) — and Disney (NYSE: DIS), who will sell its products at resorts and cruise liners.
Whilst these partnerships with Impossible Foods present healthy competition to Beyond Meat, it remains a private company, limiting its resources needed to win bids for companies such as McDonald’s. This leaves Beyond Meat as the singular alternative for investors who realize that meat alternatives are no longer a fad and could be the answer to a greener, more sustainable future with no compromise on taste.
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Contributing Writer at MyWallSt
Poppy likes companies that go the extra mile. Her favorite stock is Amazon because she is fond of its innovation, variety, and creative solutions to sustainability.