This year has been the year of IPOs. Some of the biggest companies in the world like Uber and Lyft went public earlier this year. However, it was the IPO of the plant-based meat producing company Beyond Meat Inc (BYND Stock Report) that managed to beat all expectations.
Beyond Meat stock price sat at $25 on listing day. Soon enough, it went on a massive rally as investors, as well as analysts, started piling on to the stock. It hit $235 in July and seemed to be on a roll. However, since then it has lost around 33% of its value. It’s now time to wonder whether it is time to sell the stock.
Analysts Are Bearish About Beyond Meat Stock Price
Recently, investment bank D. A. Davidson started covering the stock and rated Beyond Meat stock price as ‘underperform’. Davidson set the target price for the stock at $130. Although the report praised the company for growing its business quickly, the bank stated that the stock is overpriced. Essentially it was due to erroneous assumptions about the size of the market.
Analysts had earlier stated that if the plant-based meat market went on to capture 13% of the market, like alternative dairy, then the market could be worth in billions. The meat market is worth $1.4 trillion at this point in time. Banking giant UBS stated that this market could be worth as much as $85 billion by 2030. Over the past year, Beyond Meat has generated $165 million in sales.
However, analysts believe that equating the meat market with the market for alternative dairy is flawed. Such a case cannot be made in the case of meat. Therefore, if the total addressable market proves to be much smaller than what has been assumed, it’s clear that the Beyond Meat stock price could be overpriced. What do you think?