What happened

It's Friday, and shares of Beyond Meat (NASDAQ:BYND) are getting pounded. As of 12:10 p.m. EDT today, the stock was down 5.6%. This morning, a pair of analysts decided to downgrade Beyond Meat stock, with CFRA cutting the shares from hold to sell, and J.P. Morgan seconding the emotion with a cut from neutral to underweight (with a $122 price target on the $149 stock).

Simple red arrow declining stock chart on a white checked background

Image source: Getty Images.

So what

StreetInsider.com has details on one of these downgrades. Quoting from J.P. Morgan's report, which begins on a high note: "In the long run, we believe BYND's growth opportunity is excellent ..." things quickly turn darker.

"Street estimates are a bit aggressive right now," the analyst warns, "especially with chief rival Impossible Foods making strong inroads into Beyond's on-shelf presence." And in light of these risk factors, J.P. Morgan fears that Beyond Meat's doubling in share price this year is "above and beyond what we consider rational," says TheFly.com, quoting from the same note.

Now what

I cannot argue with any of the above. At a recent valuation approaching 300 times forward earnings, Beyond Meat shares look frightfully overpriced, and seem like a clear candidate for selling. About the only quibble I would make is that J.P. Morgan criticizes Beyond Meat for displaying "slugging fundamentals."

Beyond Meat's valuation is simply indefensible. But "sluggish fundamentals?" This stock grew sales 68.5% last quarter. Sales are up 25-fold over the last four years, and while the company is not yet consistently profitable, it proved that it might eventually become profitable by reporting positive net income in at least two of the last four quarters.

Call Beyond Meat overpriced if you like. Call it a marginally profitable (verging on unprofitable) momentum stock. One thing you cannot call this company, though, is "sluggish."

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.