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The plant-based meat substitute space is still booming, and there are some intriguing new products on the horizon, most notably Beyond Chicken Tenders. Still, COVID-19 headwinds, and the continued rise of Delta variant cases have made for a far choppier ride, as restaurants contemplate re-closing their dining rooms.
Undoubtedly, Beyond Meat has picked up traction with various fast-food firms, including the likes of burger joint A&W. Any negative impact on fast-food sales could apply considerable pressure to Beyond Meat’s top-line numbers, at least over the near-term.
Recent pressure on BYND stock may prove to be overblown here. Things could turn around in a big way once the spread of Delta slows down. (See BYND stock charts on TipRanks)
With a brutal second quarter now in the rear-view mirror, Beyond Meat stock certainly seems like one of few high-growth companies not trading at nosebleed-level multiples.
That said, the name still has its fair share of risks. I am bullish on the stock.
Long-Term Fundamentals Fully Intact
The near- to medium-term picture doesn’t look great for the innovative alternative meat producer. But the long-term fundamentals and growth story haven’t changed since the stock fell off its latest cliff in late June.
Beyond Meat’s new formulation is remarkably healthier, with less fat and calories, and reportedly more protein, than real meat. The pace of innovation going on behind the scenes of Beyond Meat is still quite jarring. Every iteration of Beyond Meat’s flagship burger seems to be getting better-tasting, and better for you.
Such improvements will better cater to, not only vegetarians and vegans, but health-conscious consumers who have no restrictions on their diets. It’s not a mystery that millennials love protein.
Moving forward, future versions of Beyond Meat may very well put ground beef products to shame, as far as nutritional composition goes. As the flagship alternative meat product gets better, the company is also poised to introduce new product categories into its roster.
Beyond Meat Chicken
Chicken is the place to be in the food world these days if you crave next-level growth, especially at the international level. Poultry consumption is booming, with the market expected to grow at a solid rate over the next decade.
Beyond Meat is going for the market with its chicken substitute. While more challenging to imitate the real taste and texture of the real thing than beef, it is poised to get better and more nutritious with time.
Wall Street’s take
According to TipRanks’ consensus analyst rating, BYND stock comes in as a Hold. Out of six analyst ratings, there are five Holds and one Sell.
The average BYND price target is $111.67. Analyst price targets range from a low of $95, to a high of $120.
Bottom line
Analysts aren’t hungry for Beyond Meat shares these days. With no Buy ratings, it’s tough to get behind the name, especially with its lofty trailing 12-month price-to-sales multiple of 16.02.
Still, the solid long-term fundamentals will shine through at the end of the day. Once COVID-19 pressures ease, Beyond Meat could get back on track.
If you believe in the long-term growth story, and management’s abilities to pivot after a tough quarter, BYND stock may very well prove to be beyond undervalued, even though analysts appear to disagree.
Disclosure: At the time of publication, Joey Frenette did not have a position in any of the securities mentioned in this article
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