It was another one of those Mondays to forget on the stock market. Fear, emanating from the coronavirus outbreak in China, took over as the dominant emotion and drove the major indexes and most top stocks far down on the day.

It wasn't easy to find companies whose stock actually rose. Here is one of those rare animals. Well, I shouldn't use the word "animal" to describe it.

Beyond Burger package in a supermarket.

Image source: Beyond Meat

Fake burgers, real growth

Beyond Meat (NASDAQ:BYND) stock rose by over 4% on the day. This was understandable: iconic diner chain Denny's (NASDAQ:DENN) announced Monday that, following a pilot program in Los Angeles, it's rolling out Beyond Meat's signature Beyond Burger at over 1,700 Denny's restaurants throughout the U.S. and Canada.

Better -- employing a tried-and-true publicity stunt, selected Denny's restaurants are slinging free Beyond Burgers this Friday (with the usual "while supplies last" caveat). This is one of the oldest sales gimmicks in the world, largely because it works. Beyond Meat should benefit from the resulting publicity and from the new customers the freebies manage to rope in as fans.

The company has some good momentum behind it. Earlier this month, Dunkin' Brands Group unveiled a new ad campaign around the new Beyond Sausage Sandwich on its menu, with the fake meat provided by you-know-who. And last year saw Beyond Meat sign a clutch of deals with restaurants (Del Taco and Subway, among numerous others) and supermarket chain operators (Safeway, ShopRite, etc.).

This has helped Beyond Meat post some impressive revenue growth figures, even as its profitability is thin or nonexistent on the bottom line. The year-over-year revenue increases in the company's three reported quarters so far as a publicly traded company are 215%, 287%, and 250%, respectively.

Some investors love these numbers as much as they enjoy a juicy, plant-based fake burger. Monday was hardly the first day in its relatively brief life that Beyond Meat stock saw an encouraging pop. All in all, the shares have increased nearly fivefold over their initial public offering price when the stock launched last May. 

Meaty valuations

But wide rollouts aren't everything, nor is 200%-plus revenue growth. Beyond Meat trades at enormous multiples for a company that's still struggling to push its bottom line into the black. Of the three reported quarters, only the most recent one was profitable, and modestly at that.

For the entirety of this current fiscal year (2019), analysts are collectively estimating a loss of $0.18 per share. They believe Beyond Meat will flip to a net profit in 2020 of $0.42. That's a dramatic change, but it still means the shares are awfully pricey -- the latter figure shakes out to a forward P/E of nearly 300 at the latest closing stock price. 

I'm not convinced Beyond Meat can lift its profitability by 300%, as implied by that forward P/E.

Sure, its products are hot now and the take-up is steep. However, it already faces direct competition in the form of the Impossible Company, which makes comparable products. Further down the food line, deep-pocketed comestibles giants like Tyson Foods are going to push into this market with new competing goods. The space is going to get crowded, and the days of 250% sales growth are sure to end.

Look, I'm a fan of disruptive companies, and I like when a scrappy upstart can punch above its weight and score some big deals. But I think Beyond Meat's intensifying popularity among investors is not justified given its sky-high valuations and the competition barreling toward it, and I wouldn't count on the stock continuing to rise in price.