Forget Beyond Meat (NASDAQ:BYND): Buy This TSX Stock Instead!

Shares of Beyond Meat, Inc. (NASDAQ:BYND) look to have peaked long ago, and investors may be better off buying this Canadian stock instead.

| More on:

Beyond Meat, Inc. (NASDAQ:BYND) has been one of the hottest IPOs on North American markets since its launch on the NASDAQ last May. Although the stock’s price is half of what it was when it was at its peak in July when it would reach nearly US$240 per share, it’s still up more than 70% since going public.

But the hype surrounding the plant-based burgers appears to have died down. It also doesn’t help that Restaurant Brands, which tested the burgers on its menu at Tim Hortons’ locations, said demand was just not strong enough and announced in January that it had stopped selling Beyond Meat products.

Although the company wouldn’t rule out future plant-based meal options on its menu, Tim Hortons currently doesn’t have anything planned in the near future.

It’s been a bit of a gut punch for Beyond Meat, a stock that when it first began trading captivated investors and sent it soaring like many NASDAQ stocks often do.

And while it’s generated good returns even with the significant drop in value, it’s apparent that investors are cooling to Beyond Meat as an investment.

Trading at more than 30 times its sales and a forward price-to-earnings ratio of around 280, investors are paying a steep premium for a company that could see even more competition if plant-based burgers take off in popularity.

A better alternative?

Rather than investing in Beyond Meat, investors may want to consider Canadian-based Lightspeed POS Inc (TSX:LSPD) instead. The company also began trading in 2019, although it didn’t enjoy nearly as much fanfare as Beyond Meat benefitted from in its early days.

However, investors haven’t been exposed to a large sell-off in recent months, either. Lightspeed’s share price is about double where it was when it began trading on the TSX a year ago and has outperformed Beyond Meat.

Similar to Beyond Meat, the technology company also struggles to turn a profit, but consumers have responded positively to Lightspeed’s software and services.

And at a time when many retailers are struggling and going out of business, there could be significant demand for Lightspeed’s products and services to help improve operations and create efficiency.

By managing data and customer relationships, Lightspeed is able to add tremendous value for its customers — a big reason the company has demonstrated as much growth as it has.

In the company’s most recent quarter, Lightspeed’s sales were up 61% from the previous year. The company stated that “over 74,000 customer locations now choose Lightspeed to streamline operations, increase profits and outperform competitors.”

With revenue still a modest US$32.3 million, there’s ample room for Lightspeed to continue growing. What’s impressive is that its recurring software and payment revenue totaled US$28.4 million and increased by 58% year over year.

Although the company reported a loss of US$15.8 million, it’s an improvement from the US$71.1 million loss it incurred a year ago. For now, the company appears to be focused on growth, though management realizes that if it were to slow things down, profits would be attainable.

Lightspeed presents an attractive opportunity for growth investors today, and it’s less risky than Beyond Meat.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor David Jagielski has no position in any of the stocks mentioned. The Motley Fool owns shares of Lightspeed POS Inc. The Motley Fool recommends RESTAURANT BRANDS INTERNATIONAL INC.

More on Investing

think thought consider
Tech Stocks

Is CGI Stock a Buy Even With No Dividend Yield?

CGI stock may not have a dividend to speak of. But does that necessarily mean you should ignore this top…

Read more »

A robotic hand interacting with a visual AI touchscreen display.
Tech Stocks

Why Now Is the Time to Invest in Canadian AI Stocks

Are you looking for one of the most solid Canadian AI stocks out there? This one is probably your best…

Read more »

The letters AI glowing on a circuit board processor.
Tech Stocks

Why AI Stocks Should Be in Every Canadian Investor’s Portfolio

AI stocks continue to be one of the best options out there for long-term investing, especially when considering Canadian options.

Read more »

stock research, analyze data
Bank Stocks

Canadian Bank Stocks: Buy, Sell, or Hold?

There are opportunities and risks on the horizon for the Canadian banks.

Read more »

Young Boy with Jet Pack Dreams of Flying
Stock Market

Is Air Canada Stock a Good Buy After Its Q3 Results

Down almost 60% from all-time highs, Air Canada is an undervalued TSX stock that remains an enticing investment in November…

Read more »

cloud computing
Investing

Where to Invest $10,000 in November

Given their solid underlying businesses and healthy growth prospects, I expect these two defensive stocks to outperform uncertain outlook.

Read more »

coins jump into piggy bank
Retirement

Here’s the Average RRSP Balance at Age 44 for Canadians

Holding stocks like Alimentation Couche-Tard (TSX:ATD) in an RRSP is a good way to build your wealth.

Read more »

dividends can compound over time
Dividend Stocks

Want a 7% Yield? The 3 TSX Stocks to Buy Today

These TSX stocks are offering high yields of over 7%, making them attractive for investors seeking steady passive income.

Read more »