For the time being, Wall Street may ignore the bottom-line figures: Beyond Meat is a budding company where cash is more likely to be used to drive growth than to just report profits. The top-line is where the company will need to deliver.
The stock has almost quadrupled since its IPO early last month, briefly breaching the $100 mark. The positive rally was spurred by the company’s remarkable history of revenue growth and investor confidence in the alternate meat industry, which is set to grow at an annual rate of 40% over the next 10 years.
READ: Why Beyond Meat valuation is beyond logic
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Earlier today a report by the Wall Street Journal that stated that plant-based meat product manufacturers are struggling to meet the rising demand, spurred another stock rally.
Beyond Meat will emerge a winner
if it delivers big on the top-line. If it also gives a full year guidance, it
will be an icing on the cake.
The El Segundo, California-based company’s market cap is almost 70 times its 2018 full-year revenue, thus making the valuation beyond reason. Post the Q1 results, investors will be looking to find the reasons.