Sizzling: Beyond Meat shares extend gains to over 600% since IPO

Market capitalisation up to $11.2bn puts veggie burger firm above Xerox and TripAdvisor

At its session high, the stock would have booked a gain of 645 per cent from its $25 IPO price on May 1st

At its session high, the stock would have booked a gain of 645 per cent from its $25 IPO price on May 1st

 

Beyond Meat continued to sizzle as investors lapped up shares in the veggie burger maker following a solid debut earnings report last week, cementing the stock’s status as this year’s best-performing initial public offering.

Shares in the California-based company jumped as much as 34.5 per cent on Monday to a record high of $186.43 before paring that advance to 23 per cent at closing time.

At its session high, the stock would have booked a gain of 645 per cent from its $25 IPO price on May 1st. It also bumped the company’s market capitalisation up to about $11.2 billion (€9.9 billion) – putting it above the likes of Macy’s, Whirlpool, Xerox, Harley-Davidson and TripAdvisor.

Net revenues

Monday’s rally comes after Beyond Meat last week said net revenues are on course to rise more than 140 per cent year-on-year to more than $210 million in 2019, higher than analysts’ estimates.

“Beyond’s results and outlook revealed strong underlying business momentum across retail and food service channels and healthy gross margin leverage,” said Adam Samuelson, an analyst at Goldman Sachs, on Friday following the company’s results.

The stock currently has two “buy” ratings, seven “hold” ratings and zero “sell” ratings on Wall Street, according to Bloomberg data.

Beyond Meat’s triumph contrasts with other companies that have rushed to public markets this year, including ride-hailing apps Uber and Lyft, which are down 3 and 18 per cent respectively from their IPO prices. Scrapbooking site Pinterest shares are up 50 per cent since its listing.

Bullish

Wall Street and investors are bullish on the company’s prospects given the growing appetite for plant-based protein from consumers looking for healthier and more environmentally responsible alternatives to meat. Some analysts are predicting the market for plant-based meat could be worth as much as $100 billion in 15 years.

However, competition in the market is heating up, with Impossible Foods striking a distribution deal with Burger King, while packaged goods company Nestlé has also launched meat-free burgers.

A key test for Beyond Meat’s meteoric rise could come on October 29th when the 180-day lock-up period expires and more shares hit the market.

– Copyright The Financial Times Limited 2019