It’s often best to throw out your personal biases when you’re investing. This is particularly true when it comes to a stock like Beyond Meat (NASDAQ:BYND). While I love to eat a 40-ounce steak from time to time and the idea of paying for fake meat alternatives doesn’t appeal much to me, I can no longer deny that the company holds significant long-term promise.

The faux-meat maker has seen great success during the novel coronavirus pandemic, as meatless options are increasingly popular worldwide. In the past, many analysts have hit BYND stock over the head with a hammer, but it looks like it’s finally time to lighten up on it a bit.

However, I’m not ready to join the bulls just yet. There are still plenty of reasons for caution looking at it through a longer-term scope. This is true for any stock backed by a hyperbolic growth narrative.

BYND stock will likely rage on in the years ahead. It just might not soar as high as some analysts suggest. Here’s why.

Examining the Extreme Bullishness In Beyond Meat

Many Beyond Meat bulls like to think of it as the “Tesla of food.” Like Tesla (NASDAQ:TSLA), it’s a key player with a product behind several popular social movements (in this case, environmentalism and healthy eating). However, while Beyond certainly has game-changer potential, the hype might be a little too grand.

One of my main issues with the hype narrative is the notion that faux meat will replace regular meat within the next 15 years (as claimed by Impossible Foods CEO Pat Brown). A faux meat “revolution” is upon us, depending on who you ask. But sometimes revolutionary ideas take much longer to develop before they become an actual world-changing movement.

More people will undoubtedly add fake meat alternatives to their diet in the years to come. Plenty of people with balanced diets include a mixture of legumes, fish, dairy and animal meat for protein in their diets. There’s no reason to think they won’t continue adding faux meat into the mix more frequently in the years ahead. But the idea that most people will drop meat completely (and, by extension, Beyond Meat will reach some sort of godlike status among food companies) is severely flawed. At least over a 10-year span.

There’s still reason for excitement, however.

The products are gaining enormous popularity. Meanwhile, other concerns, like price, could become less significant in time. To some, “Beyond Meat is still a luxury.” That idea still stands today. Its current products are far more expensive than regular meat offerings — and vegetarian options as well. (You can make meatless burgers from a bag of lentils and a few other ingredients for much cheaper). But the company is working to make its products more affordable.

Improved pricing should pick away at some bearish arguments over time. And if analysts like InvestorPlace.com’s Luke Lango are correct, Beyond Meat will enjoy first-mover advantage in this space as it becomes the household name behind the faux meat revolution. It seems like a win-win situation.

But it’s still not that simple.

Real Meat Could Become a Luxury, But That Doesn’t Matter

Beyond Meat might not stay a “luxury” food item in time, but it will likely take much longer for it to replace meat entirely (if that’s even possible in our lifetime). Consider, for example, that of many of the world’s richest countries struggle to exceed 10% vegetarianism. While lofty ideas like a completely meatless world will undoubtedly gain strength in the years ahead, it’s doubtful that a massive amount of people will shift over to a diet that exclusively favors Beyond’s products. And that doesn’t even consider that the competition in the fake meat space is stronger than ever.

For example, according to CBI Insights:

“Beyond Meat’s chief competitor, Impossible Foods has also seen aggressive growth. The Redwood City-based company has aggregated more than $1.3B in total disclosed funding. Its products can be found at chains like Burger King, Qdoba, White Castle, and Red Robin.”

BYND stock bulls would like you to believe that as a potential key leader in the faux meat movement, Beyond is guaranteed success as our society (and the world in general) shifts towards “green” initiatives. It’s true that this might be our future. (I hope it is). But the adoption of these practices over the next 10 years in the U.S. — and globally — is much less guaranteed thanks to the numerous political challenges associated with these movements.

Likewise, bulls often tout millennial’s inclination towards ethical consumerism as a reason Beyond Meat will become the new standard. After all, products like Beyond Burgers make consumers feel good about their place in the world. However, when it comes to the world of food, it’s still not enough to eliminate many of their cravings for a real, artery-clogging burger.

When it comes to food, taste is king. That’s something faux meat hasn’t yet been able to replicate or exceed convincingly. And although “Meatless Mondays” are becoming a thing, we’re still far away from widespread meatless diets. As such, there’s plenty of room for both faux meat and meat to coexist as part of the omnivore diet most people enjoy.

That’s not necessarily a detriment to Beyond Meat’s prospects. But it’s also where things start to get a bit murky for Beyond Meat as the supposed king of a supposed meat-free future.

While the roles might reverse, where faux meat is the standard and real meat is the luxury item, that whole process will likely take much longer than you think to unfold. Even so, it won’t guarantee that Beyond’s products are the go-to choice, as many of the stock’s long-term bulls would have you believe.

The competition for Beyond Meat is tightening. Many argue that it’s already a household name, but I personally haven’t heard anyone mention it more than its competition when talking about faux meat. This lack of significant moat will make it difficult for the company to fortify its leadership position in the fake meat industry, as other players in the space grow stronger.

The Bottom Line on BYND Stock

So it all boils down to this:

The adoption of faux meat is inevitable. Over the years, it may even replace meat as a primary source of protein in our diets. But the timeframe for that is debatable. Likewise, Beyond Meat has a strong position at the front of this movement. But again, its future as the king is also debatable.

It has climbed 135% this year, leading to arguments that it’s currently overvalued. It seems like that’s the case, but I also agree with hardcore bulls like Lango that it has more room to run over the next 10 years. And, as he suggests, if you already have shares, it’s probably best to hold on to them for the long run.

But unlike Luke, I’m skeptical that it will become the faux meat king. And I’m also skeptical that the faux meat revolution is actually upon us. With BYND stock, the long-term case comes down to this — where do you think we’ll be in the next 10 to 20 years?

I think we’re probably headed toward a far more meatless future, only the timeframe is probably much longer than Beyond Meat bulls would have you believe.

Also consider that there’s no clear reason to think another food company — upcomer or established — couldn’t devour much of Beyond’s strength in the years ahead. Ultimately, there are still plenty of reasons to keep questioning its valuation.

On the date of publication, the author did not have (either directly or indirectly) any positions in the securities mentioned in this article.