A competitive analysis – Trefis
Actions of Beyond meat (NASDAQ: BYND) are currently trading at $ 107 per share, which is actually slightly below its pre-Covid level. On the other hand, shares of Bunge Ltd (NYSE: BG) are trading at $ 86 per share, 65% more than before Covid. Does this mean BYND is a better stock pick compared to BG? Both companies are in the food industry, but the offerings differ a bit. While Bunge is involved in the soybean export, food processing, grain and fertilizer trade, Beyond Meat offers innovative plant-based meat products. Despite BG’s higher market capitalization, revenue and margin levels, BYND enjoys a significantly higher valuation multiple (P / S) due to faster growth in revenues and margins, and the fact that this is a new company that should continue to grow rapidly in the years to come. We compare a multitude of factors such as historical revenue growth, returns and valuation multiple in an interactive dashboard analysis, Beyond Meat vs. Bunge: Industry peers, but which stock is a better bet?
Increase in income
- Beyond meat income have demonstrated better growth compared to Bunge in the past few years, with BYND’s revenue growing 132% over the past three years. In comparison, Bunge income experienced a decline of more than 3% during this period. Over the past twelve months, BYND has experienced 13% revenue growth while Bunge’s revenue has grown 12%. The main reason for BYND’s faster revenue growth over the years has been the growth in fresh meat sales by retail outlets and chain restaurants. Bunge’s revenues have declined over the past three years due to a decline in the agri-food and sugar and bioenergy sectors. During the pandemic year, BYND’s revenue was more affected due to restaurant closures.
- Beyond Meat earns revenue from the sale of plant-based meat products – both frozen and fresh meat – at retail outlets, restaurant chains, and restaurants. Most of its revenue previously came from the food and beverage division, but that changed during the pandemic, with retail becoming the most important segment.
- Bunge earns income from agribusiness, edible petroleum products, sugar and bioenergy, and fertilizers.
- Bunge has a higher profitability than Beyond Meat. Bunge’s operating profit margin was above 3% in 2020 and stood at 4.3% in the last twelve months.
- On the contrary, Beyond Meat suffered losses. Its margins were -12% in 2020 and -9.4% over the last twelve months. The company incurred a lot of R&D, marketing and expansion expenses, which resulted in losses.
- However, the improvement in Beyond Meat’s margins has been startling. With strong revenue growth, margins fell from -89% in 2017 to -9.4% over the last twelve months. By comparison, Bunge’s margins hovered between 1% and 5%. Thus, the recovery of Beyond Meat’s margins is notable.
- Beyond Meat appears to have a stronger balance sheet due to a better cash position compared to Bunge.
- BYND’s debt amounts to 77% of total shareholders’ equity and liabilities, up from 29% in the case of Bunge.
- However, when considering liquidity as a percentage of total assets, the metric rises to 69% in the case of BYND, compared to just 2% for Bunge, suggesting that BYND has a much better approach to management. cash.
Net of everything
In absolute terms, BYND’s revenue and margins appear to be much lower than BG’s. However, Beyond Meat’s revenue and bottom line growth over the past few years is commendable. With faster growth and a better cash position, it rightly commands a higher valuation multiple. More importantly, Beyond Meat is expected to see further rapid growth over the next few years, mainly thanks to its recent partnerships with Alibaba Group, McDonald’s, Coles in Australia, etc. Being a fairly young company on the path to rapid growth, Beyond Meat seems like a good bet at the moment.
What if you were looking for a more balanced portfolio instead? here is a quality portfolio which has been regularly beating the market since 2016.
Invest with Trefis Wallets that beat the market
See everything Trefis Price estimates