Beyond Meat has blown up.
Since going public in early May, the stock has raced nearly 600% higher, taking its market cap above $10 billion. The plant-based meat company is now larger than 80 S&P 500 companies, including Macy's, Xerox and Mylan.
While Beyond Meat is by far the market's biggest IPO success story this year, it's not the only one. Other recent debuts, including Zoom Video, Revolve Group and PagerDuty, have blasted higher since their floats.
After such a massive run for these companies, Miller Tabak equity strategist Matt Maley is growing worried a top is forming in the hot IPO market.
"There's no question there is froth in the IPO market and that could continue for a while. But there are reasons to be concerned," said Maley on CNBC's "Trading Nation" on Tuesday. "The number of stocks that were unprofitable in the 12 months leading up to their IPO is back to levels that we saw back in the bubble of 2000."
Some of the highest-profile IPOs this year, such as Beyond Meat, Lyft and Uber, are companies without profit. Beyond is not projected to generate quarterly income until the third quarter of 2020, according to FactSet estimates.
"Also, the IPO ETF has outperformed the S&P by quite a bit over the last few years. It's up over 100% since early 2016, which is up almost twice as much as the S&P," said Maley.
The Renaissance IPO ETF, which holds stocks that have gone public within the past two years, is up nearly 38% this year, while the S&P 500 has added 16%.
"But, the thing that concerns me the most is that a lot of these companies are not brand-new companies like they were back in the last bubble. They're companies that have been around for quite a while, and when smart people sell their company or take them public it's usually a sign of a top," said Maley.
For example, Goldman Sachs had its IPO in mid-1999 before the bubble burst a year later, says Maley. Similarly, he notes Blackstone debuted in 2007 before the financial crisis.
Beyond Meat, in particular, could soon come back down to earth after its mega rally, says Nancy Tengler, chief investment strategist at Butcher Joseph Asset Management.
"I worry about valuation," Tengler said during the same "Trading Nation" segment. "At some point, enthusiasm will wane [for Beyond] and this will be valued just like any other food company, and it is trading at an exponential multiple to sales compared to the rest of the groups. So, I'm wary."
On a price-to-sales ratio, Beyond Meat trades at more than 35 times sales, while Hormel, General Mills and Kellogg's each trade at less than three times sales.