Past losses are irrelevant though. The price of a stock is fully determined by expected future cash flows.
I am a regular consumer of their burger patties and don’t even eat regular beef burgers anymore because of their similarity in taste.
I wouldn’t say that past loses are irrelevant. Sure, they aren’t the only factor but company’s current and historical financial situation is/should be an important factor in decision making. Otherwise it’s all just hopes that things will get better.
It’s not. If i expect a company to make 5 billion in profit tomorrow, i dont care if it made losses in the last 5 or 50 years. As long it is still solvent and has enough liquidity. You can see that in all stocks, it’s just a fact.
Best examples are all new tech stocks. Uber, lyft or monzo etc…
Sure, but in order to expect that a stock will go up/down you need to have some basis for such expectations. Company’s balance sheet is one of such fundamental basis, unless you have insight into company’s secrets. Otherwise we are back to square one, i.e. hopes. This has more to do with gambling that investing. And sure, if you’re fine with it then go for it. There is no need to throw “facts” around. The fact is that company’s financial situation is part of fundamental analysis.
I do not think you could apply the same logic by comparing a social media company with a food chain. Ultimately, nobody knows what is going to happen to BYND, it will either go into liquidation or thrive in the next decades, just like most growth companies. And perhaps people may have different opinions on what constitutes “overvalued”. After all, Amazon was considered overvalued at $400 back in 2013
It is a hot stock right now for sure. Especially when healthy diet and veganism is in all time high. Price could be driven more for the hype rather than value. Happens with every company at the start. Will take time to establish fair price i guess
I think it’s useful to use stories and qualitative predictions when trying to value a stock, as long as this is tempered by the relevant quantitative data. It has been said that humans are poor at estimating compounded growth, and this combined with the potential variation and measurement error in any one of tens of variables makes any kind of rigid numbers based model less appropriate for a business like beyond meat.
At the same time I try not to get swayed by statements like ‘it’s the future’ and hyperbole about potential market sizes. I think there is such a thing as overpaying for a share and I think too many people are desperate to have some exposure to exciting businesses at whatever cost.
Aswath Damodhran talks about the need to balance a story based and numbers based approach to valuation and suggests everyone will lean either more to the stories side or the numbers side. I think the type of business/stage of business/industry should also inform our approach.
I think we can all think of cases where not taking account of the story cost-Amazon, retail, and cases where not considering the numbers cost-most bubbles.
The biggest thing putting me off Beyond Meat is that the market cap is way over what could reasonably be expected for the industry, never mind one company that makes up a part of the industry.
It’s an exciting product with a lot of potential, which I think has encourged a lot of people to think with their hearts and not their heads when purchasing their shares and driving the prices up.
At some point I think the share values will have to fall to a reasonable level, but fair play to anyone who’s managing to make some money off them in the meantime (and hopefully when they do fall they don’t cause the company to collapse also - again, it’s an exciting product).