It was about a month ago that shares of Beyond Meat, Inc. (NASDAQ:BYND) were trading at around $200. But the stock’s been struggling in recent weeks, falling more than 30% since mid-October. Investors have been more bearish on the markets in recent weeks as COVID-19 cases have been rising. And it also didn’t help that earlier this month when Beyond reported its third-quarter results, its numbers were a bit uninspiring.
The company’s net revenue of $94.4 million was up just 2.7% year over year. The disappointing sales growth was due to COVID-19 as consumers were buying up suppliers earlier in the year and by the third quarter there wasn’t as much of a need to continue doing so, especially as cities reopened from lockdowns and people weren’t worrying about stocking up on necessities. But with cases on the rise again and the threat of more lockdowns looming under Joe Biden, it’s possible that there is another surge in demand for Beyond products in the near future.
Today, shares of Beyond trade at more than 20 times book value and a forward price-to-earnings multiple of well over 400. The PEG ratio, which factors in future growth, is also near four – investors look for the PEG to be one or lower.
But as bad as these multiples look, Beyond’s never really traded at multiples that would’ve attracted value investors. And a price-to-sales multiple of just 19, it’s still much cheaper than the 50 times revenue it was trading at a year ago.
Although its price isn’t cheap, Beyond could be a good buy on the dip as the plant-based burger trend isn’t disappearing anytime soon, and all it could take is one good quarter to send this stock soaring again.