Mon. Jan 24th, 2022

Beyond Meat sits low in the pick order when it comes to plant-based chicken. The company – best known for its faux sausages and burgers – has suffered repeated delays with its poultry product plans. He only launched his meat-free chicken tenders in October. Even fast food giant Yum Brands’ The decision to offer the company’s vegan fried chicken at its 4,000 US KFC restaurant could not increase Beyond Meat’s share price.

Investors should be skeptical. After a huge initial public offering in 2019, California’s Beyond Meat’s market value fell from a peak of $ 12 billion to just $ 4 billion. Despite this decline, it is still trading at a business value of almost seven times next year’s estimated revenue. A confluence of factors means it will not soon rule the alt-meat sleeping place.

Demand for Beyond Meat products has cooled after an early pandemic-inspired increase in sales. Consumers eat less at home as restrictions disappear. Nevertheless, sales at restaurants and fast food chains that carry its products have not yet fully recovered. Worse, supply chain problems have limited the availability of its products in stores. Meanwhile, competition from competitors like Impossible Foods and even Nestlé keeps prices low. Costs for everything from ingredients like soy and peas to packaging and transportation are rising.

In the most recent quarter, revenue stood at $ 106 million, 13 percent more year-over-year, but far less than the $ 120 million to $ 140 million the company targeted. U.S. sales, which make up about two-thirds of total group revenue, fell 14 percent. Rising input costs eroded its gross profit, which contributed to an increase in the net loss to $ 54m.

Poor results mean Beyond Meat’s valuation on an EV to forward revenue basis is higher than the alt-milk group Oatly, as well as established meat producers and packaged food groups such as Tyson Foods and General Mills, both of which are making consistent profits.

The growing trend for alternative meat products means Beyond Meat is not above hope. But its slow growth and valuation make for an unpleasant combination.

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