Past Meat (NASDAQ: BYND) shares went public through an IPO (initial public offer) in Could 2019. Its IPO was priced at $25 per share, and BYND inventory ended the primary buying and selling day at $66.79. It touched an all-time excessive of $235 in July and is presently buying and selling at $63.76. So, an investor who bought BYND inventory after its IPO would have generated destructive returns on this interval, grossly underperforming the broader indices.
Let’s see if the pullback in Past Meat inventory makes it a prime funding at present costs.
The bull case for Past Meat inventory
Past Meat is a part of a quickly increasing market. In truth, the retail marketplace for plant-based meat is forecast to grow from $29.4 billion in 2021 to $162 billion in 2030. Past Meat initially loved a first-mover benefit permitting it to spice up gross sales from $32.5 million in 2017 to $406.7 million in 2020.
Along with retail shops, Past Meat merchandise are also available in quick-service restaurant chains similar to McDonald’s, Starbuck, and Restaurant Manufacturers Worldwide. In 2021, it entered right into a three-year strategic partnership with McDonald’s, the place Past Meat would be the sole provider of plant-based meat merchandise to the fast-food large.
Past Meat’s product referred to as the McPlant would first be examined in eight retailers within the U.S., after which will probably be rolled out all around the nation by the tip of 2022. Nevertheless, the nationwide rollout has been preponed and would possibly start in Q1 of 2022.
The bear case for Past Meat inventory
Whereas Past Meat has grown its top-line at a stellar tempo till now, the corporate is presently wrestling with rising competitors. Any increasing market attracts new gamers making it troublesome to boost product costs and profit from increased revenue margins.
Wall Road expects gross sales development to decelerate to 14.5% to $466 million in 2021. Analysts additionally forecast gross sales to rise by 38% to $643 million in 2022, on the again of its not too long ago introduced partnerships.
Past Meat inventory is valued at a market cap of $4.03 billion, suggesting a worth to ahead 2022 gross sales a number of of 6.3x, which is steep for a loss-making firm. Regardless of its double-digit income development estimates, BYND’s loss per share is forecast to widen from $0.60 in 2020 to $1.77 in 2022.
So, do you have to purchase BYND inventory?
The large pullback in share costs would possibly make Past Meat enticing to contrarian traders. However Past Meat continues to commerce at a premium, making it a high-risk wager, particularly if the sell-off in development shares continues within the close to time period. The common 12-month worth goal for BYND inventory is $72.4, lower than 20% above its present buying and selling worth. There are a number of different firms that provide a much more compelling danger/reward profile.
Quickfire spherical:
Is Past Meat a public firm?
Sure, Past Meat listed on the NASDAQ on Could 3, 2019.
Does Past Meat pay dividends?
No, Past Meat doesn’t pay any dividends to traders.
Is Past Meat worthwhile?
No, within the final 12-months, Past Meat reported an working lack of $109.30 million.
