Beyond Meat, Inc.

BYND Details
 
Top-line Grew by 250% on y-o-y Basis: Beyond Meat, Inc. (NASDAQ: BYND) operates in food business in the United States, which offers unique products like plant-based meats.

Q3FY19 Business Highlights for the Period ended September 2019: BYND declared its quarterly results, wherein the company reported revenue of $91.96 million, up 250% on y-o-y basis. The company reported gross profit at $32.78 million, as compared to a $5.04 million in the previous corresponding period. The business witnessed higher sales volumes across the retail, restaurant and foodservice channels. The quarter was marked by expansion of points of distribution, which includes addition of new customers. Gross margin came in at 35.6%, improved from 19.2% in pcp, which was aided by operating leverage and production efficiency improvements. The company reported a net income of $4.09 million during the period as compared to a net loss of $9.34 million in Q3FY18. The company exited the quarter with total current assets of $418.94 million, which includes cash and cash equivalents of $312.45 million and accounts receivable of $34.48 million. The company reported its total assets and net assets at $454.84 million and $376.82 million, respectively, as on 30 September 2019.


Key Q3FY19 Income Statement Highlights (Source: Company Reports)

Outlook: For FY19, the business expects net revenues within the range of $265 million to $275 million while adjusted EBITDA is forecasted at ~$20 million.

Stock Recommendation: The stock of BYND closed at $117.45 with a market capitalisation of $7.22 billion. The stock is trading at the lower band of its 52-week trading range of $45 to $239.71. The stock has generated mixed returns of 51.97% and -24.28% in the last three months and six-months, respectively. The business offers unique products of plant-based meats and delivered exponential growth in the recent past. The company focuses on product innovation which experiences the taste, texture and other sensory attributes of popular animal-based meat products while appreciating the nutritional and environmental benefits of eating its plant-based meat products. BYND is likely to release its earnings for December 2019 quarter on 28 February 2020. Considering the price movement over last three months, business prospects and ahead of its December quarter results, we recommend a watch stance on the stock at the current market price of $117.45 per share, down 2.6% on 21^st February 2020.

 
BYND Daily Technical Chart (Source: Thomson Reuters) 
 
 

Virgin Galactic Holdings, Inc.

SPCE Details
 
Achieved “Weight on Wheels” Milestone: Virgin Galactic Holdings, Inc. (NYSE: SPCE) is a vertically integrated aerospace company pioneering human spaceflight used for private individuals and researchers. The company will report its fourth quarter results on 25^th February 2020. Recently, the company reported that it has reached the “Weight on Wheels” milestone in the build of its second commercial spaceship. The above achievement marks strong progress in the manufacture of Virgin Galactic’s space vehicle fleet by The Spaceship Company. In reaction to the news, the stock price of the company witnessed a sharp rise in a short span of time.
 
Q3FY19 Highlights for the Period ended 30 September 2019:  SPCE declared its quarterly results, wherein the company posted a loss from operation of $4.21 million, as compared to a loss of $0.22 million in Q3FY18. The company reported a loss of $0.48 million as compared to a profit of $3.03 million in the previous corresponding period. The company’s existed the quarter with total current assets at $0.12 million, while total assets came in at $677.29 million as on 30 September 2019. Net assets of the company stood at $5 million as on 30 September 2019. 

Key Q3FY19 Income Statement Highlights (Source: Company Reports)

Stock Recommendation: The stock of SPCE is closed at $33.87 with a market capitalization of $6.63 billion. The stock is trading at the upper band of its 52-week trading range of $6.90 and $42.49. The stock has generated exponential returns of 369.11% in the last three months as recently, SPCE informed its achievement of securing “Weight on Wheels” Milestone. The company is yet to deliver a positive bottom-line, however, it is progressing well in its spaceship segment and looking to provide trips to space to the astronauts.We are of the view that the sharp spike in the stock price is unlikely to sustain in the near-term and the stock might see a healthy correction.  Considering the current trading levels, business prospects and earnings to be released soon, we have a watch rating on the stock at the current market price of $33.87 per share, down 9.1% on 21^st February 2020.

 
SPCE Daily Technical Chart (Source: Thomson Reuters)
 

Frontline Ltd

FRO Details

Reported Revenue of $187.64 million: Frontline Ltd. (NYSE: FRO)is an international shipping company located in Bermuda, which operates and owns oil tankers and product tankers. 

Q3FY19 Business Highlights for the Period ended 30 September 2019: FRO declared its quarterly results, wherein the business posted total operating revenue of $187.64 million as compared to $188.77 million in in Q3FY18. The company posted its operating income at $12.11 million, representing a decline from $23.10 million in Q3FY18 due to higher operating expenses and lower operating gains. The company posted a net loss of $9.96 million as compared to a profit of $2.33 million in the previous corresponding period. The company reported its spot average daily time charter equivalent for VLCCs, Suezmax tankers and LR2 tankers at $22,900, $16,200 and $15,900, respectively. Cash and cash equivalent were reported at $103.83 million, while total current assets were reported at $316.96 million as on 30 September 2019. The company exited the quarter with total assets of $3,588.44 million and total equity of $1,379.89 million. 


Q3FY19 Income Statement Highlights (Source: Company Reports)

Outlook: For the Q4FY19, the company estimates its spot TCE (time charter equivalent) at $64,800, contracted for 78% of vessel days for VLCCs. The company also expects $49,400 contracted for 71% of vessel days for Suezmax tankers and $29,900 contracted for 74% of vessel days for LR2s.

Valuation Methodology: Price to Cash Flow Based Valuation

Price to Cash Flow Based Valuation (Source: Thomson Reuters)

Note: All forecasted figures and peers have been taken from Thomson Reuters, NTM-Next Twelve Months

Stock Recommendation: The stock of FRO closed at $8.13 with a market capitalization of $1.60 billion. The stock is trading at the lower band of its 52-week trading range of $5.69 and $13.33. The stock has corrected of 24.79% and 28.74% in the last one month and three-months, respectively. The company is emphasizing on increasing its spot exposure and expects the positives will be reflected in its fourth quarter FY19 results. Considering the current trading levels and business prospects, we have valued the stock using Price to cash flow based relative valuation method. For the purpose, we have taken peers like Kinder Morgan Inc (NYSE: KMI), Enterprise Products Partners LP (NYSE: EPD), Euronav NV (NYSE: EUAV) and arrived at a target price of lower double-digit upside (in % terms).The company is likely to release its fourth quarterly earnings for FY19 as on 27 February 2020. Hence, we recommend a “Speculative Buy” rating on the stock at the current market price of $8.13 per share, down 0.61% on 21^st February 2020.

 
FRO Daily Technical Chart (Source: Thomson Reuters)

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