Here's Why Beyond Rose Meat Up To 36.5% Today – The Motley Fool

What happened

Actions of Beyond the meat (NASDAQ: BYND) has grown more than 36% today, reaching a market capitalization of more than $ 7 billion, after the company released its operating results for the first quarter of 2019. Investors were eagerly awaiting the latest update. day on the growth trajectory of society – and the pioneer of animal-free protein has certainly delivered the thing.

Beyond Meat's total revenue increased by 215%, thanks to the ramp-up of distribution channels in the restaurants, which increased gross profit by 424%. The company achieved a gross margin of 25% in the first quarter. Investors might think it will be difficult to follow, but management's expectations for the coming year prove the opposite.

At 10:19 am Eastern Daylight Time, the stock had gained 27.7%.

So what

Management has issued full year 2019 guidance of at least $ 210 million, up over 140% over the previous year, as well as a neutral adjusted EBITDA. . This is quite impressive if we consider that Beyond Meat has generated only $ 16.2 million in revenue in 2016.

While investors are enjoying the glory of epic growth, it is worth mentioning that the animal-free protein developer now has a value of more than $ 7 billion. If the company achieves a turnover of $ 210 million this year, it will be valued at 33 times sales. It's quite expensive for a food company.

Let's take two comparisons in plain sight, though imperfect. Tyson Foods is trading at 0.8 times sales, while Whole Foods Market was acquired by Amazon at a multiple of 0.85 times sales. As more and more animal-free protein products come onto the market, restaurants will have more weight when negotiating partnerships, which will likely erode Beyond Meat's margins.

Now what

Beyond meat is one of the fastest growing companies in public markets at the moment, but investors may want to ask if the company will be able to grow and earn its premium before competition from animal-free protein warms up. Again, I said that there are a few billion dollars.