Beyond Meat (NASDAQ:BYND) peaked at $201.55 last week on June 18 and, at a market cap of nearly $10 billion, is at risk of profit-taking. The company reported revenue of just $40 million in the first quarter but markets focused on other bullish developments. With the stock pricing in significant growth ahead, Beyond Meat has no room to fail.
The company lost $0.14 a share (non-GAAP) and lost $0.95 (in GAAP terms). Forward-looking as markets are, markets believe revenue will accelerate as its ground beef flavor is launched on June 24. Whole Foods, Wegmans, HEB, and Atlanta-area Kroger stores will sell the product. On June 12, Tim Hortons said it would bring the Beyond Meat Breakfast Sandwiches to ~4,000 restaurants.
The chances that the deal makes billions worth of revenue for Beyond Meat is unlikely. Plus, the company needs to increase its production facilities and contract suppliers. Instead of looking at pure revenue numbers, investors should check that the profit margin improves as output increases.
Takeaway
Beyond Meat is in danger of a big correction just as cannabis play Tilray (TLRY) did after topping $300 but closing recently at $50. Timing the top and selling it at the peak proved difficult. From here, the stock’s volatility will suit speculators.
