Beyond Meat (BYND) had a plump fourth quarter, but its initial crack at 2020 guidance could use some fattening up to appease the many bulls on Wall Street.
Amid a flurry of new deals with fast giants such as Yum! Brands and strong repeat business by consumers at retailers like Target, Beyond Meat did its job on Thursday evening to justify a more than 50% surge in its stock price this year. Net sales blew away analyst forecasts. Adjusted EBITDA came in at $9.5 million versus forecasts for $5.8 million. Good to see one of the crop of buzzy 2019 IPOs (Uber, Lyft and SmileDirectClub) driving operating profits.
Here are Beyond Meat’s fourth quarter 2019 results:
4Q Net Sales: $98.5 million vs. estimates for $79.8 million
4Q Adjusted EBITDA: $9.5 million vs. estimates for $5.8 million
4Q EPS: -$0.01 vs. estimates for $0.01
Net Sales: $490 million to $510 million vs. estimates for $485.7 million
Adjusted EBITDA: about $25.3 million vs. estimates for $50.2 million
The company notched blistering sales growth in its retail (198%) and food service/restaurant segments (223%). Unclear if analysts will ding Beyond Meat for slowing sales growth at each segment compared to the third quarter.
Beyond Meat founder and CEO Ethan Brown tells Yahoo Finance the quarter was “outstanding.” Brown made a point to note that the above consensus EBITDA came despite new entrants into the market offering discounted products. It goes a long way to tempering concerns about near-term competitive activity weighing on the premium Beyond Meat brand.
More mind-blowing stock price gains ahead?
While Wall Street may initially frown upon Beyond Meat’s below consensus full-year EBITDA outlook (attributed to investments in R&D and international expansion), the growth rates in the business support aggressive investment to support future profits. That is exactly what Brown is thinking.
“That was a very strategic decision to put that adjusted EBITDA out slightly lower. We would be crazy not to invest in growth right now,” Brown says. “There is just so much opportunity right now. We want to make sure we move as fast as we can to open up these markets.”
Sounds like reason enough to us to keep the Beyond Meat 2020 rally alive and kicking, even if it temporarily cools down.
Brian Sozzi is an editor-at-large and co-anchor of The First Trade at Yahoo Finance. Watch The First Trade each day here at 9:00 a.m. ET or on Verizon FIOS channel 604. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.