Erns Watch - Beyond Meat, Alternative Protein Theme & Macro Sins Erns Watch - Beyond Meat, Alternative Protein Theme & Macro Sins Erns Watch - Beyond Meat, Alternative Protein Theme & Macro Sins

Erns Watch - Beyond Meat, Alternative Protein Theme & Macro Sins

Equities 8 minutes to read
Kay Van-Petersen

Global Macro Strategist

Summary:  Earnings Watch aims to highlight some of the key names that are in heavy rotation on investors' radars.

(These are solely the views & opinions of KVP, & do not constitute any trade or investment recommendations. By the time you synthesize this, things may have changed.)

Erns Watch: Beyond Meat, Alternative Protein Theme & Macro Sins


Beyond Meat: $134 Last, $8.4bn Mkt Cap, +78% YTD,  P/E 224x, 2Q Est. -$0.021 EPS, Rev $99.0m

  • So number of you have asked KVP a number of times to weigh back in on Beyond Meat [BYND] & the alternative protein theme… so given the BYND releases results after the US market today, it’s a great opportunity to check back in on the name. Lets just dive right into it…

  • Always at the risk of confirmation & anchoring bias, KVP has been a big proponent of Beyond Meat (BYND) since it listed in May of last year… (for those on the mailing list, see slide 9 attached of the deck that we used that day)

This puppy can move:

  • …in fact, he flagged it about a wk after it listed as that coincided with an invitation only VIP event focused around actional trade & investment ideas. The stock which had listed at $25 closed the first day up +163% to c. $66 & KVP’s view was it was still very much a buy. Yes, yes… also sounded bat #$^! crazy to himself at the time (this is not unusual mind you), yet when your Octopus-Bushaby instincts are tingling, there is wealth to be created – which is likely the best protection of wealth.

  • As a side tangent here: Obvious push-back that was received when initially flagging this at the round-table of super distinguished ladies & gentlemen, was the classic mickey mouse stuff on valuation & well as viability/need of the product (more on this later) – yes, but no on the former.

  • Point being, valuation matters the majority of the time for single name stocks from an equity fundamentals approach (its also relative valuation, over absolute – unless of course you are dealing with outright controlling stakes (then who cares about P/E if you are breaking even within 12m due to a special dividend). Obviously for your Seth’s of the world who have built a career & window dressing business around being value investors – something like BYND is never going to be in their pool of competence & comfort.

  • From KVP’s viewpoint, generally speaking the cost of omission is exponentially greater than the cost of commission – hence when KVP speaks to a lot of Series A VCs & Angel investors who get to hung up on valuation concerns at early stages, it’s a screaming structural flaw in their process (IMHO). After-all, if something is going to go up +10x to +20x or even +1000x… why are you hung up over the valuation being 5x Sales or 500x Sales. KVP has yet to see a super successful VC who’s entire formula was always getting cheap valuation – if they are out there, please flag (& yes, it would be paradoxical from a marketing strategy perspective. I am the VC that only likes to value founders companies cheaply. I.e. if a founder is going to them, its for a reason – this one truth, likely eliminates the possibility of true “value VC investors”).

  • A key central creed of House Dragon: it is part of the way to have losses & to have trade ideas that do not work out (in fact, if you are not – you are likely not taking enough risk & pushing the envelope enough). The ultimate Macro Sin however, is missing out completely on the prime conviction investment themes – the ones that can make you +10x to 10,000x on your capital. That is just downright viscerally unacceptable & goes against everything that is the underlying objective of a Global Macro Investor.

  • Anyhow, “back to the lecture at hand”… BYND…

  • The stock incidentally was around the same $66 lvl a wk post listing, it then proceeded to climb was around that same lvl a wk later, it then proceeded to climb a further c. +260% to an ATH of c. $235 in under 3 months – yes this is a stock, not crypto! And at $8.4bn mkt cap its not a penny, pump & dump stock but a class of one SME with goliath like growth prospects. It is worth noting the drawdown to trough, naturally coinciding with the classic 6mo lock-up period (share overhang) saw the name fall by c. -77% to about $54 low lvls in the Mar 2020 sell-off. The immediate sell-off post C19 was c. -57%. Since then we are c. +150% from the lows based on yest’s close of $134.

  • So in case you have not been paying attention so far we can say two things with almost 100% certainty. One: BYND is not a low beta blue chip name, with little volatility where grandma should have 100% of her equity allocation. Two: At an expensive one-year fwd P/E of 224x (c. +300% 2021 erns growth), as well as just sub $10bn market cap & despite it being very well-covered for its size, BYND is still too small to be on the radar of real-money accounts that are used to having exposure in single stock names equivalent to or more than $10bn. This brings us to…

The Law of Large Numbers, or in the Equity World – the market cap game

  • Can Amazon at c. $1.5trn of mkt cap, double to $3trn over the next 12-18m?

  • Absolutely.

  • Now can it 5x over that same period? Hmmm… Obviously possible yet highly unlikely. The probability moves from what KVP would see as a +50% probability, on the first question to say sub 10%... You just get the law of large numbers kicking in… i.e. Given its size, Amazon can only keep growing so far & fast, without entering new industries to disrupt (& on this point healthcare & insurance is one to watch, c’mon Bezos forget the moms & pops retail stores & go after the corporate fat cats!)

  • The likes of BYND at sub $10bn market cap, can easily double to $20bn in the next 12-18 - hell we’ve seen it do +8x in 4 months since its 1st May 2019. The probability of it doing +5x over 12-18m is significantly greater than say 10% probability of Amazon doing so… is it 50% though? Hmmm… perhaps not that high… what if it was 3x? …that starts to get closer to being above 50%. What if one stretched the horizon, so say +5x in 3-5yrs time? Well then KVP again feels there, its greater than 50%...

  • Again these probabilities are far from scientific, they are a cumulation of a number of different factors including:

    • 1. general backdrop investment thesis of a massive multi-year risk-on & equity bull market being triggered by the leviathan liquidity response from fiscal & monetary policy makers (see the Dragon’s two key pieces on the regime we are in: Piece One & Piece Two)

    • 2. BYND being a class of one pure play on the alternative protein space which taps into…social impact investing as well as aspirational sustainability lifestyle trend that continues to exponentially grow & lastly…

    • 3. The animal protein industry (Global Meat, Poultry & Seafood) is estimated to be c.$7.5 trillion by 2025. If BYND just gets 1% of that, that’s $75bn or c. +9.0x their current $8.4bn mkt cap. Point here is, one does not have to be a maximalist to be a BYND & alternative protein bull – i.e. meat consumption is not going to 0 overnight, its not about everyone becoming a vegetarian. Yet one can see how a small dent in a $7.5 trillion industry can easily accrue to the alternate protein players.

    • 4. The social impact & sustainable investing (ESG) theme is here to stay, it is not a far. It is a concern that has transcended from millennials, Gez Z & is being echoed across older generations as well – with powerful veterans from ECB’s Lagarde to Blackrock Larry Fink, rethinking how investments & policies are crucial in incorporating sustainable elements for the long-term well being of the planet. This solely capital holder & grow at all cost focus (volume vs. sustainability), to a stakeholder & sustainable growth focus (quality > volume = sustainability).

  • Biggest risk here is a massive fudge up through mismanagement – yet at the end of the day, once you get past the ground breaking tech, IP & pioneering start, this is now the food distribution business. I.e. there is a lot of highly skilled executive in that space, this is not a business like Tesla or SpaceX who valuation’s likely get minimum halved if Elon was to get hit by a Durian Truck (yes, again said this before if you are invested in size, in any of Elon’s enterprises – you should get some key alien insurance on that dude. KVP would bet your left arm, there are dozens of HFs who are limit long Tesla & this is not something that they have even considered hedging against. There are risks… & there are RISKS… there is vision & there is VISION… last two are META).

  • Bottom line, outside of the IP (where highest risk there has passed, i.e. we don’t have BYND consumers turning into vegan zombies running across the country side), mismanagement risk at a company like BYND is manageable. Remember how Chipotle bounced back after the E-coli fumble, KVP remembers flagging the name to a few of you who ran for the hills – the stock recovered handsomely & went on to make new ATHs.

  • This reminds us of Munger’s adage, who likes to invest in simple & robust business models to mitigate against the probability in the future of ‘dumb” management running it. As opposed to complex businesses where you are always going to need, NASA Rockstar equivalent brains to steer the ship correctly. KVP does not do complex businesses. KVP does simple. Simple. Is. GOOD.

  • Other concerns are what you would expect of anything that is new & pioneering: What about the incumbents, won’t they just squash the lead of the likes of Beyond Meat & Impossible Meats? What about regulation across the world? Real meat loving consumers will not eat this! The “How dare they take my steak away dam it, I am red blooded American-Australian-European-African-Asian-Etc who eats meat because I am a real man.. “ mentality… etc. To its all sodium & not healthy for you, etc.

  • Again, not saying these are not valid pockets of headwinds against the stock & overall thesis. What I am saying is that they are futile in the much larger tailwind of sustainability, not just from a lifestyle & aspiration perspective of global citizens but also factual irrefutable detrimental climate crisis impact of the pathway that we are on globally.

  • Without even scratching the surface of the cascading effects of the planetary cost of animal protein, let us just highlight four examples for context. One: Water consumption per kilo of vegetables is 322 litres. In chicken its 4,325 liters per kilo. And in Beef its 15,415 liters per kilo. Two: Fresh water constraints continue to mount up every year globally, as sources peter away (some savvy Family Offices that KVP knows, are picking up fresh water rights across the globe) - livestock related food stocks account for 1/3 of global fresh water use (sounds low to KVP to be honest). Three: livestock account for c. 15% of greenhouse emissions, with beef & dairy production account for 2/3 of that amount. Four; Deforestation - e.g. in the Amazon – is often linked to making room for the cattle & livestock industry.

  • So imagine the global cluster F that we are orchestrating, we are not only using more water we are also taking away the ability for our one planet to replenish the oxygen in the system, whilst we increase the CO2 emissions. If aliens were looking down on earth - they would see the equivalent of people defecating & poisoning their own kitchens & homes - they would conclude that collectively as a species we are significantly backwards & failing.


Try it yourself & take a step back…

  • If you have not tried a Beyond Meat or Impossible Burger (their other main competitor which is private & likely due to list in if not this year then 2021), go for it – as a previous self-confessed carnivore, KVP could not tell you the delta, from taste to texture to smell… is like meat, without the methane, water & other resource costs.

  • Now take a step back & think – what fraction of traditional animal protein consumers just need to pivot towards adding alternative protein to their diets.

  • Now take a further step back & think how the vast majority of the world is vegetarian & guess what, they can eat all they beyond meat burgers, chicken, pies & sausages that they want, whilst still adhering to their local cultures, lifestyle & religious beliefs. India by itself is 1.4bn people, the cast majority of whom are Hindu & don’t consume animal protein.

  • A few folks people out there have taken the stance that BYND is a long until Impossible Meats lists, then you short BYND to buy impossible… yaddah… yaddah… similar to Uber & Lyft… yes & no.

  • The upside in the alternative protein space is so big, there is enough to go around – also the pure plays will continue to have integrity, trust, nimbleness & clean climate slate on their side, that the incumbent slow & large traditional animal protein slaughterhouses players will just not be able to replicate.

  • And yes, just as like in Twitter, Tesla & Spotify – there will always be a potential take-over premium to be paid for the likes of Beyond Meat.

Earnings Expectations, Growth Estimates & Price Action:

  • The 12m consensus price target is c. $105 significantly below (c. -30%) the current $134 share price, with a range of with a range of  $180 to $45 or +34% to -66% of the current price.

  • Analysts have a c. 14% buys in the name, vs.41% sells with the balance being holds at 45%.

  • The name is up c. +78% YTD, with a +150% jump from the Mar lows of c. $54.  

  • 1yr earning growth are expected to be c. +300% for 2021 (+2203% for 2020). For 2Q earnings, Est. -$0.021 EPS, Rev $99.0m

  • Link to 1st quarter results

  • Here is the link to their 1st quarter Webcast, that also includes a Q&A

  • Beyond Meat [BYND] results should be out after the US markets close today

Closing Thoughts:

  • As KVP has a global investor multi-year macro approach, it should come as no surprise that quarterly reports should be irrelevant once one has become comfortable with a prime conviction thesis. The investment thesis should have the shelf-life to run for years & in this case for decades, its just making sure management are on point & not getting too high off their own supply – again think risk here is also minimal given the business, think tech has much higher risk of that (think of Apple prior to Jobs coming back years later & the Ipod, think of Kodak [who shelved the idea of a digital camera}, think of Nokia [who shelved the idea of an engineer on what would have been the first smartphone], think of IBM, etc.

  • When KVP thinks of BYND, its on a 3-5-10yr horizon with those time-horizons being a good base case function of the multiples he would expect, i.e. at least 3x in 3yrs, 5x in 5yrs, 10x in 10yrs as well as the obvious ability to weather drawdowns that may be -80% from recent highs. The name being at least $100bn in 10yrs time, seems very conservative to KVP. So when you conservative scenario is still 10x in 10yr, one needs to size accordingly. Remember another creed of House Dragon, sizing is more important than the idea.

  • Not trying to say, one cannot trade the name – its defiantly volatile enough – yet would keep it simple, 50% core clip & 50% trading clip, as that is default trade management for all prime conviction trade views.

  • If KVP had access to Impossible Foods, he would probably buy it eyes closed – NAV Portfolio allocation approach… will it be expensive? Probably, yet again, experience tells KVP that we tend to get what we pay for (resource wise be it time, money, expertise, work, etc). He would rather overpay & get it wrong, than pass & commit the ultimate Macro Sin, the Sin of Omission on a prime conviction thesis.

  • Outside of an outright ‘Enron’ or ‘Wirecard’ fraud scenario, the “worst case” scenario for KVP is a bidder for BYND coming in & offering a +50% to +100% premium for the name sooner rather than later – i.e. capping the monetization of future exponential growth. If KVP could only keep 10 names in an equity only high growth portfolio, BYND would be one of the 10.

  • Let the dragon get to work on unearthing the other 9, as always feel free to share any names & long-term investment themes that have that huge macro potential to run on a secular basis.


Start-End = Gratitude + Integrity + Vision + Tenacity. Process > Outcome. Sizing > Idea.

This is the way 



The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (
- Full disclaimer (

Saxo Markets
40 Bank Street, 26th floor
E14 5DA
United Kingdom

Contact Saxo

Select region

United Kingdom
United Kingdom

Trade Responsibly
All trading carries risk. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more
Additional Key Information Documents are available in our trading platform.

Saxo Markets is a registered Trading Name of Saxo Capital Markets UK Ltd (‘SCML’). SCML is authorised and regulated by the Financial Conduct Authority, Firm Reference Number 551422. Registered address: 26th Floor, 40 Bank Street, Canary Wharf, London E14 5DA. Company number 7413871. Registered in England & Wales.

This website, including the information and materials contained in it, are not directed at, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in the United States, Belgium or any other jurisdiction where such distribution, publication, availability or use would be contrary to applicable law or regulation.

It is important that you understand that with investments, your capital is at risk. Past performance is not a guide to future performance. It is your responsibility to ensure that you make an informed decision about whether or not to invest with us. If you are still unsure if investing is right for you, please seek independent advice. Saxo Markets assumes no liability for any loss sustained from trading in accordance with a recommendation.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc. Android is a trademark of Google Inc.

©   since 1992