Beyond Meat (BYND) - Get Beyond Meat, Inc. Report shares fell sharply Tuesday, setting the stock up for its biggest single-day decline since listing on the Nasdaq last month, after analysts at JPMorgan cut their rating on the stock amid concerns for its sky-high $10 billion valuation.

JPMorgan said that while it still thinks Street estimates for sales and earnings from the plant-based food group are too conservative, and that its potential addressable market in the alternative meat market remains compelling, the embedded value in Beyond Meat shares, which have risen more than 570% since debuting on May 3, is now priced into the year's hottest IPO. JPMorgan cut its rating on the stock to neutral from overweight, but bumped its price target by $1 to $121 per share.

"With a valuation this elevated, any hiccup in performance -- real or perceived -- could lead to a meaningful correction in the share price," JPMorgan analyst Ken Goldman wrote. "We do not think an Underweight rating is appropriate at this time. Yes, our price target indicates downside risk; however, it is built on a DCF that models the long-term growth story. It is risky to short Beyond Meat, in our view, given that 2019 financials are likely to exceed Street expectations."

Beyond Meat shares were marked 20.7% lower at the start of trading Tuesday to change hands at $134.37 each, a move that would still leave the stock more than 430% north of its $25 IPO price - which was in part set by bankers at JPMorgan. Beyond Meat now has a market value of just over $8 billion, some 25 times higher than its 2020 sales forecast.

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Beyond Meat's plant-based foods, which included burgers and sausages, are expected to more than double its revenue over the next two years, the company said last week, with CEO Ethan Brown expecting break-even earnings on a top line of 'at least' $210 million in the current fiscal year.

Big U.S. restaurant chains such as Burger King and A&W have also reported a surge in demand for plant-based products, with the former seeing a surge in foot traffic in its St. Louis test market for the "Impossible Whopper," a sandwich it hopes to sell nationwide before the end of the year made by rival start-up Impossible Foods.

"In a point that one can only find exciting as we look to the future, with all this activity we're still in the very early innings of growth," CEO Ethan Brown told investors on a conference call last week. "Based on recent Nielsen panel data, Beyond Meat has just 2% household penetration in the United States. Just as we this tremendous runway ahead we see uniquely compelling future internationally."

TheStreet's founder, Jim Cramer, said the stock's incredible gains are easier to understand in the context of its restaurant sales potential, which Credit Suisse suggests could be $750 million a year from McDonald's alone by 2030.

"The company has a number of irons in the fire including the possibility of some big wins among fast food, maybe Restaurant Brands (QSR) - Get Restaurant Brands International Inc Report Burger King, maybe even McDonald's which currently is trailing Nestle's (NSRGY) - Get NSRGY Report burger in 1400 of its German stores," Cramer said. "Beyond Meat's management, when asked about the competition, explained that they have all made a number of mistakes and miscues that has given Beyond Meat a real head start."

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