At $1.5bn, is plant burger firm Beyond Meat over-valued?
Chris Beauchamp, a senior market analyst at IG, says YES.
For many, Beyond Meats IPO would seem to mark the perfect “market top” moment. A company producing a cutting-edge product, with ongoing losses and the risk that it may never make a profit, is seeking to become publicly traded.
Like so many new firms, it has yet to make any money, with losses each year since its foundation. Investors would be buying into a company where hope is one of the main drivers for the future.
Leaving aside the possibility that it will change consumption habits, investors rushing to buy in the wake of the IPO are likely to see their investment suffer in value in the short term. There are positives, such as the existing agreements with some restaurant chains and steadily rising margins, but the firm will face stiff competition from much bigger competitors, which could easily see it overtaken by those with economies of scale that allow them to produce more at lower prices.
Changing the world is one thing, being a successful investment is something else – and it is not clear that Beyond Meat yet falls into the latter category.
Olivia Utley, deputy editor at TheArticle, says NO.
Valuing a loss-making company which does not know when it will report a profit at $1.5bn sounds punchy, to put it mildly. But in the case of Beyond Meat, it makes sense.
According to a recent survey, the number of vegans in Britain has increased by more than 360 per cent over the past decade, and the trend in the US is evRead More – Source