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Why Beyond Meat Fell Nearly 6% on Monday

By Eric Volkman - Feb 22, 2021 at 6:47PM

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The combination of high valuations and ever-creeping competition appears to be spooking some investors.

What happened

Beyond Meat (BYND 13.25%) traded down 5.8% on Monday. There didn't seem to be a direct catalyst for this; perhaps it's the realization that the stock's valuations are very high, while potential rivals are breathing down the company's neck.

So what

Last Thursday, tech titan Bill Gates was interviewed by Yahoo! Finance on climate change. In the interview, he effectively pegged Beyond Meat as one of the leading companies involved in efforts to create a greener world.

A Beyond Meat burger, accompanied by fries.

Image source: Beyond Meat.

Interestingly, the stock fell after his remarks. Even a shout-out from a towering figure in the corporate world -- these days a green warrior -- couldn't mitigate that. 

As Gates was speaking, Beyond Meat rivals were busy plotting their next moves. An article in the widely read Silicon Valley newspaper The Mercury News published over the weekend detailed the efforts of a new company called Air Protein. This start-up aims to harness NASA-inspired technology to create meatless food items from carbon dioxide -- i.e., almost literally crafting edibles from the air.

Now what

Others are also nipping at Beyond Meat's heels. Privately held Impossible Foods, for one, has similarly made inroads into the retail and restaurant segments. And several companies in the Big Food industry have either developed alt-meat products, or have them on the drawing board.

Meanwhile, despite some hot growth numbers, Beyond Meat has yet to become consistently profitable, and its current PEG ratio is a stratospheric 45. Such dynamics might be worrying investors just now.

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