Is Beyond Meat's Growth Story Already Over?
In the third quarter of 2020, Beyond Meat (NASDAQ: BYND) reported revenue growth of 3% year over year -- it's slowest growth as a public company by far.
Slow revenue growth is problematic for Beyond Meat shareholders for two reasons. First, the stock has a rich valuation. Consider it currently trades around 19 times trailing sales, compared to 0.5 times sales for a company like Tyson Foods. If revenue growth slows, a premium valuation isn't justified -- at least not this high. After all, it could get cut in half and still have a premium valuation.
Second, plant-based meat is a growing industry. According to a report from Research and Markets, revenue for plant-based meats is expected to grow at an 18% compound annual growth rate (CAGR) between 2019 and 2025, reaching $12 billion in revenue during that time. If 18% growth is the industry benchmark, Beyond Meat's 3% growth isn't going to cut the mustard. It could be a signal it's losing market share to competitors.
Source Fool.com
