Who was it that once said it’s easier getting to the top than staying there? Its doubtful they were talking about Beyond Meat (BYND), but they could have, nonetheless.
Since its IPO, the meat industry disruptor’s trajectory can only be described as wild – shooting up continuously and then kicked unceremoniously down from the mountain peak. Its all-time-high towards the end of July stood at $234.90. It is now trading at $77.34, indicating it has lost two thirds of its value since then. This naturally begs the question: Is this the time to get in?
William Blair’s Jon Andersen recently met up with Beyond Meat’s management, and the 4-star analyst left with some key takeaways.
Among them, the analyst highlighted Beyond Meat’s mission to replicate all the sensory attributes of meat naturally targets a consumer base that is beyond vegans/vegetarians. As awareness and availability grows, and the pricing gap to real meat closes, consumers looking to expand their diet are likely to add plant-based meat to their shopping list.
BYND’s brand strength and recognition is also a work in progress, as the company recently ran an initial test in 28 McDonalds stores in Ontario, Canada. The test will probably transition eventually to the U.S. Furthermore, the company’s distribution relationships have enabled it to move beyond North America to 53 countries in Asia and from next year, BYND will have manufacturing capacity in Europe.
Andersen concluded “Our thesis is Beyond Meat represents a unique growth opportunity. This is due to its vast addressable market; strong value proposition; and rapidly developing brand and scale, which collectively create the potential for the company to generate truly distinctive financial growth and societal benefits.”
Despite the analyst’s positive takeaways, Andersen’s rating of BYND remains a “market perform,” indicating he believes the healthy development is already factored into the stock price. (To watch Andersen’s track record, click here)
In contrast to Andersen, Bernstein’s Alexia Howard is rather more bullish, noting that although selling pressure will probably continue in the near term, she feels the downside is limited. The analyst thinks BYND’s price drop means now is the time to get in, saying it is a “straightforward valuation call.” To this end, Howard upgraded her rating from “market perform” to “outperform.” Howard’s $106 price target implies nearly 40% upside potential from current levels. (To watch Howard’s record, click here)
All in all, the majority of the Street sides with the William Blair analyst’s cautious take on the vegetarian-burger maker, as TipRanks analytics demonstrate BYND as a Hold. Out of 13 analysts tracked by TipRanks in the past 3 months, 3 are bullish on Beyond Meat stock, 8 remain sidelined, while 2 are bearish. With a return potential of 47%, the stock’s consensus target price stands at $112.91. (See Beyond Meat stock analysis on TipRanks)