A look at the share price movements of key plant-based food companies including Beyond Meat, Oatly and The Very Good Food Company
Beyond Meat (BYND)
1 July closing: $135.19
30 July closing: $122.7
Plant-based pioneer Beyond Meat’s share price slumped 18.6% during July, ending the mid-summer month with a closing price of $122.7, a month after hitting its highest price since February.
Analysts are suggesting slow growth and a high valuation are to blame for the share price dropping throughout July, but the tide could turn in the days to come as the company announces its second quarter earnings on 5 August.
In May the company posted a first-quarter net loss of $27.3 million, down from a $1.8 million profit the previous year. Losses were attributed to high marketing costs and lower prices, despite sales rising 28% during the quarter.
The Nasdaq-listed plant-based burger maker faces increasing competition from new entrants and those raising significant funds to produce their own alternative-protein offerings. And while Beyond is leading in foodservice, it will need to speed up innovation and product development efforts to compete against some of the more prolific companies out there.
1 July closing: $23.40
30 July closing: $17.75
Oatly’s share price has had a tough month after a damning report by activist fund Spruce Point Capital Management accused the Swedish business of misleading investors on its accounting and sustainability practices.
The report by the short-seller insisted Oatly has failed to report that its impact on water consumption was worse than dairy milk and questioned its rationale for using three auditors in six years.
Shares in Oatly were down 6.29% to a new post-IPO low of $19.80 following the report’s release on 14 July, although Piper Sandler analyst Michael Lavery has since defended the company’s position, noting that its brand equity and pricing power set it apart in the dairy-alternative market.
Lavery said: “Its ESG credentials are also strong. Its brand, reporting practices, ESG credentials, and auditor history were questioned in an activist short-seller report, but we have not yet found its claims to change our view or point to unreliable financials.”
The Very Good Food Company (VERY)
2 July closing: C$3.82
30 July closing: C$3.23
One analyst reported VERY shares to be a “very lacklustre investment” back in March, describing them as “arguably the single most overvalued stock in the whole packaged foods arena”. VERY’s market cap on the CSE is 68x its full-year 2020 revenue of C$4.6 million, although we’ve come to expect and accept that high valuations in the increasingly competitive alternative protein and plant-based foods space are commonplace.
The Canadian Securities Exchange-listed company is in the midst of expanding its distribution channels in North America and recently committed to making its products available to buy online in the UK. In Q1 it made more than 50% of its full-year 2020 revenue, with growth expected to continue in subsequent quarters.
Tattooed Chef (TTCF)
1 July closing: $21.40
30 July closing: $19.72
In April the company’s share price dipped below $16 on the resignation of chief financial officer Charles Cargile. The upward trend returned in June following the release of Tattooed Chef’s Q1 revenues which exceeded analyst expectations by $6 million, with growth powered by record sales of its own brand products versus private label.
Analysts appear bullish on TTCF and its potential to gain significant market share in the plant-based food space. They see the stock as somewhat undervalued considering the company’s target to grow its revenue to $200 million annually and occupy 20% of the market.
Shares appear be on an upwards trajectory again on the news that Tattooed Chef has secured a nationwide US distribution partnership with Kroger. Look out for the company’s Q2 results in mid-August.
Date published: 3 August 2021