Beyond Meat (NASDAQ:BYND) & GURU (TSX:GURU): 2 Rising Plant-Based Product Stocks

Summary

• An environmentally conscious world is embracing alternative meats substitutes amid the pandemic.
• Nearly 56 per cent of the Canadian Gen Z believe that healthy habits are the key to a good life.
• The increasing popularity of plant-based meat products have placed companies such as Beyond Meat (NASDAQ: BYND, BYND:US) and GURU Organic Energy (TSX:GURU) on investors’ radar.
• BYND and GURU stocks have gained 6.6 per cent and 14.5 per cent in the last five days, respectively.

Plant-based meat alternatives are not exactly a new phenomenon. Tofu, soya, and vegan food has been around for a while. But now, an increasingly environmentally conscious world is gravitating towards alternative meats substitutes. This is propelling companies such as Beyond Meat (NASDAQ: BYND, BYND:US) and GURU Organic Energy (TSX:GURU) to new heights. 

A recent study by Stanford Medicine scientists found that diets consisting of plant-based meat food, instead of red meat, significantly lowers cardiovascular risk factors. Multiple studies also show that meat-based industries and livestock cultivation are one of the biggest contributors to greenhouse gases. So, shifting to meat alternative food products does make a huge impact on the environment.

Piling on to the above factors is a world struggling with the pandemic, which has led to more global citizens trying to adapt a cleaner and healthier way of life.

According to a research by market intelligence firm Mintel Canada in June, nearly 56 per cent of the Canadian Gen Z believe that healthy habits are the key to a good life.  The increasing popularity of plant-based meat products have placed companies such as Beyond Meat and GURU on investors’ radar.

Let’s take a look at these stocks and their recent developments.

Beyond Meat Inc. (BYND:US, NASDAQ: BYND)

Beyond Meat stock has witnessed a gain of over 6.6 per cent in the last five days, mainly due to consumers’ heightened demand for plant-based meat options during the COVID-19 pandemic. The growth comes after the stocks posted a decline of 17.25 per cent in the last three months.

The company recently collaborated with McDonald’s (NYSE: MCD, MCD: US) McPlant vegetarian menu that is set to debut in 2021. The faux meat firm also grabbed headlines earlier in November for its deal with Yum Brand’s (NYSE: YUM, YUM:US) chain Pizza Hut, which launched two plant-based meat sausage pizzas in the UK and the US.

The C$8.6-million company has been constantly trying to reinvent its plant-based meat product line to appeal to consumers’ palate. 

The stock has advanced by over 81 per cent year-to-date. Beyond Meat’s 10-day average trading volume is 9+ million. Its current price-to-book (P/B) ratio is nearly 23 per cent and the debt-to-equity (D/E) ratio is 0.17 as per TMX data. 

Beyond Meat’s 6-month price chart (Source: EODHD/Others, Thomson Reuters)

The company’s net revenues went up by 2.7 per cent year-over-year to US$94.4 million in the third quarter 2020 (ended September 26). This growth was driven by increased retail channel sales amid the pandemic. 

However, gross profit slumped to US$25.5 million in Q3 from US$32.8 million a year ago. The company posted a net loss of US$19.3 million as compared to a net income of US$4.1 million in 2019. These losses were accrued due to expenses attributable to the pandemic, including inventory write-offs and product repacking charges.

Beyond Meat ended the quarter with US$214.6 million cash and cash equivalents in hand and an outstanding debt of US$50 million.

The company expects a slowdown in its foodservice business due to a stay-at-home economy to continue as consumers stop panic-buying that ensued at the beginning of the pandemic. The stock is currently trading at US$137.42.

GURU Organic Energy Corp (TSX:GURU)

Montréal-based GURU started trading on the Toronto Stock Exchange on November 2 and   the stock has zoomed by over 90 per cent since then.

Before the stock listing, GURU closed US$ 34.5-million financing last month and its reverse takeover transaction with Mira X Acquisition Corp in October.

Founded in 1999, GURU claims to be the world’s “first natural plant-based energy drink” and has been aiming to grab a market slice of the US$ 15-billion US energy drink industry and non-alcoholic beverage category. to. 

In its investors deck, GURU claims millennials are driving the consumption for the plant-based products who are looking for and demanding healthier alternatives. The company’s revenue grew by three times in the last five years to reach C$ 17.5 million in fiscal year 2019 (ending October 31, 2019). It posted a gross profit of C$ 11.5 million and a net loss of C$ 0.7 million for FY19.

In the last five days, GURU stock has advanced by an impressionable 14.5 per cent. It is trading at C$ 15.30 at the time of filing this report.