Plant-based meat substitute producer Beyond Meat managed to beat expectations for its second-quarter earnings by nearly quadrupling its sales from a year ago. Despite the hype and its recently released earnings report, the company's stocks still faltered, falling by as much as 14 percent on Monday.
The drop in the company's stock prices has been seen by some as an obvious correction given that it had spiked by more than 840 percent during its initial public offering (IPO). Investors were somewhat nervous about the company's performance for the quarter, especially given that most of Wall Street has pegged the stock to be extremely overvalued.
Beyond Meat released its quarterly earnings report late Monday, revealing sales figured that were four times more than what the company made a year ago. The firm reported a second-quarter loss of $9.4 million on sales of $67.3 million. The company's overall earnings before income taxes, amortization, depreciation, and adjusted to exclude stock-based compensations came in at a gain of $6.9 million.
According to the company's chief financial officer, Mark Nelson, the growth in net revenues can be attributed to the success of its new products and the rapid expansion of its distribution network. Nelson also stated that the formation of new strategic partnerships with food service providers and retailers has greatly increased its sales numbers. The demand for its products has apparently also substantially grown since the company went public.
Despite the better-than-expected earnings report, Beyond Meat's shares still faltered during trading. Shares continued to sink as the company announced plans to sell even more shares in a planned secondary offering. The firm is reportedly planning to sell an additional 3.25 million shares. Around 250,000 shares will be issued by the company, while around 3 million will be coming from existing shareholders. A good chunk of the 3 million shares will be sold by major stakeholders such as Kleiner Perkins Caufield & Byers and Obvious Ventures.
Beyond Meat has yet to announce the prices for its secondary offering. Shortly after the announcement, Beyond Meat shares plunged by more than 14 percent. A secondary offering will allow the company to handle the flood of sales after the end of its six-month lockup period. Beyond Meat's lockup period officially ends on October 29 this year.
While the plunge may have been significant, Beyond Meat's shares still stand at around nine times its IPO price of $25 a share. After recovering slightly during Monday's trading, the stock closed at $222.13, giving the company a current market valuation of around $13.4 billion.
