Vegan burger startup Beyond Meat hits triple its IPO price as it eyes up European expansion

Vegan burger startup Beyond Meat’s share price jumped today as it said it's mulling a move to cater directly to European customers with a new production site opening in the Netherlands.

However, concerns that this expansion might be too much too soon have left investors divided.

Read more: DEBATE: At $1.5bn, is plant burger firm Beyond Meat over-valued?

Beyond Meat, a leader in plant-based substitutes, said that its partnership with Zandbergen World’s Finest Meat will expand to include the construction of a new manufacturing facility in Zoeterwoude, the Netherlands.

The company hopes that its first facility outside the US will help reduce the brand’s transportation footprint and help reach European clients more efficiently.

“The consumer response in Europe has been very positive,” said chief executive Seth Goldman. “We are pleased to have strong strategic partners in Europe like Zandbergen to help us grow our global footprint.”

Earlier this month, the group saw its initial public offering (IPO) price at $25 a share – the top end of the company’s expected range – for 9.62m common shares.

This meant that the company’s implied market valuation was $1.46bn (£1.15bn), with Microsoft founder Bill Gates, Virgin founder Sir Richard Branson and actor Leonardo DiCaprio among high-profile investors.

Following the announcement today, the group’s share price rose 6.71 per cent to $85 – more than triple its IPO price.

Wall Street analysts, however, have warned that this new price may have jumped the gun.

“We think the stock’s valuation already factors in a best-case scenario for the company’s growth rate over the next six years,” Credit Suisse analyst Robert Moskow told CNBC, adding that the new price does not take into account “typical near-term execution risk for early-stage startup companies”.

Goldman Sachs was also neutral, writing in a note to investors that Beyond Meat is “still in the early innings of this transformation and is achieving notable scale on manufacturing, brand awareness, product innovation, and distribution” but noted the “upside opportunity” of international expansion.

But in a note to investors, JP Morgan said that it believe the company’s profit could ultimately exceed $5bn versus last year’s $88m: “We view Beyond’s growth opportunity as extraordinary: we model a total addressable market for plant-based meat in 15 years of $100bn, up to 100x larger than todays. Beyond is a true disruptor with a differentiated product and a commitment to innovation.”

Read more: Extra large order: Beyond Meat hikes offering ahead of float

In May 2016, the company released the first plant-based burger to be sold in the meat section of international grocery stores and has, more recently, become a staple at consumer favourites Tesco in the UK and Albert Heijn in the Netherlands. The company’s products are also available in Australia, Chile, Hong Kong, Israel, the Middle East and Taiwan.