Beyond Meat shared tanked after the company announced a mixed earnings report and a secondary offering plan.
Beyond Meat CEO Ethan Brown speaks before ringing the opening bell at Nasdaq MarketSite, May 2, 2019 in New York City.Wall Street analysts, normally a bullish bunch especially on recent IPOs, can't bring themselves to recommend buyingand a secondary offering after the bell on Monday, causing the stock to drop by 13% in premarket trading to $193.65 Tuesday.
"We remain on the sidelines as valuation appears stretched at over 40x enterprise value/next twelve months sales, implying limited upside potential from a valuation perspective," Bernstein analyst Alexia Howard said. "We believe current valuation is pricing in the opportunity over the execution while not fully accounting for risks driven by competitor entrants into the market, potential penetration fatigue, success of unknown innovation and scaling capacity," a note from research firm Consumer Edge said.
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