By CCN.com: In yet another example of the ongoing irrational exuberance in the stock market, Beyond Meat soared 15% in after-hours trading to $115 after its first post-IPO earnings report.

Or rather, its first post-IPO loss report. Once again, the stock market insists on valuing money-losing businesses in the billions of dollars.

Beyond Meat Stock Price Is Beyond Insane

The stock market is giving Beyond Meat stock a $5.7 billion valuation after reporting a mere $40 million in revenue this quarter. Beyond Meat lost $6.6 million in the quarter and generated negative cash flow of about $2 million.

The $5.7 billion Beyond Meat stock valuation isn’t justifiable on expected full-year results. Beyond Meat guided to full-year revenues of $210 million, placing the valuation at a ridiculous 27x revenue.

Even mega-unicorn Uber is only valued at 8x revenue.

Why So Excited About a Vegan Burger Stock?

What is going on with Beyond Meat’s stock? How can the market send this loser stock so high?

The first reason is that this behavior is common in late-stage bull markets. The stock market is already at its third most expensive in history. These times tend to bring out the speculators in huge numbers as a signal of relentless yet unsupportable optimism makes its way into the market.

The stock market is signaling that it may think this is a mass market. That’s all well and good, but Beyond Meat is not a special or unique product. Anyone can make it, there are competitors, and there will be even more competitors coming to town.

That leads inevitably to the worst possible type of business: a commodity.

Beyond Meat Is a Commodity with No Profit

Commodity businesses can only distinguish themselves on quality, price, and customer service. Quality is the easiest element to wipe out. If Beyond Meat can come up with a tasty vegan burger, anyone can. Trust me, here in Los Angeles, there are plenty of delicious vegan restaurants and they all serve a version of the same things.

Price wars will crush margins. Customer service in a mass market is not easily distinguishable.

All one has to do is look at publicly held chicken companies like Pilgrim’s Pride or Tyson Foods. These companies trade at less than 1x sales, which means they are worth less than a year’s worth of sales.

Beyond Meat’s Stock Has 97% Downside

Based on that valuation, Beyond Meat’s stock is a bubble and literally worth only 3% of its current stock price, or $4.50.

Like every other stock that is juiced higher by speculation, one day the speculators and momentum traders leave for greener pastures. They’ll be feasting on real steaks while Beyond Meat bagholders will be eating grass.