Beyond Meat, Inc. (BYND) is a food company that offers plant-based meat products. The company’s product offerings include Beyond Burger, Beyond Sausage, Beyond Beef, Beyond Meatballs, Beyond Breakfast Sausage Patties, Beyond Breakfast Sausage Links, Beyond Beef Crumbles, and Beyond Italian Sausage Crumbles. It sells plant-based products across the three leading meat platforms — beef, pork, and poultry.
BYND’s EPS and revenue came in below consensus estimates in its last quarter. The company’s loss per share came in 34.2% higher than the $1.14 estimated by analysts, and its revenue was 1.4% below consensus estimates of $149.08 million. BYND recently announced that it was laying off 4% of its global workforce.
With inflation remaining elevated, the demand for plant-based meat products has taken a hit. 210 Analytics President Anne-Marie Roerink said that the sales of refrigerated meat alternatives have been going backward since Q3, 2021. Although plant-based meat alternative buyers are spending more, the volumes of plant-based meat alternatives have been falling.
The company has lowered its guidance for fiscal 2022, with its net revenues now expected to come in the range of $470 million to $520 million, down from the previous guidance of $560 million to $620 million. As of July 2, 2022, the company’s cash and cash equivalents stood at $454.70 million compared to the total outstanding debt of $1.10 billion.
BYND’s stock has declined 62.3% in price year-to-date and 79.6% over the past year to close the last trading session at $24.57.
Here’s what could influence BYND’s performance in the upcoming months:
Disappointing Financials
BYND’s net revenues declined 1.6% year-over-year to $147.04 million for the second quarter that ended July 2, 2022. The company’s total operating expenses increased 26.6% year-over-year to $83.52 million. Its adjusted net loss widened 394.2% year-over-year to $97.13 million. Also, its adjusted loss per share widened 393.5% year-over-year to $1.53.
Mixed Analyst Estimates
BYND’s EPS for fiscal 2022 and 2023 is expected to remain negative. Its revenue for fiscal 2022 and 2023 is expected to increase 4.4% and 20.1% year-over-year to $485.05 million and $582.82 million. It failed to surpass Street EPS estimates in each of the trailing four quarters.
Stretched Valuation
In terms of forward EV/S, BYND’s 4.68x is 159.9% higher than the 1.80x industry average. And the stock’s 3.23x forward P/S is 164.4% higher than the 1.22x industry average.
Lower-than-industry Profitability
BYND’s trailing-12-month net income margin is negative compared to the 4.93% industry average. Likewise, its trailing-12-month EBIT margin is negative compared to the 8.57% industry average. Furthermore, the stock’s 0.35% trailing-12-month asset turnover ratio is 58.1% lower than the industry average of 0.83%.
POWR Ratings Reflect Bleak Prospects
BYND has an overall F rating, equating to a Strong Sell in our POWR Ratings system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.
Our proprietary rating system also evaluates each stock based on eight distinct categories. BYND has an F grade for Value, in sync with its stretched valuation.
It has an F grade for Stability, consistent with its 1.80 beta. Furthermore, its lower-than-industry profitability justifies its F grade for Quality,
BYND is ranked last out of 86 stocks in the Food Makers industry. Click here to access BYND’s ratings for Growth, Momentum, and Sentiment.
Bottom Line
The plant-based meat products industry has seen a drop in demand due to high inflation, rising competition, and premium pricing of the products. BYND is trading below its 50-day and 200-day moving averages of $30.93 and $45.17, indicating a downtrend. As inflation remains elevated, BYND is expected to tumble further.
Given its weak financials, stretched valuation, and lower-than-industry profitability, it could be wise to avoid the stock now.
How Does Beyond Meat, Inc. (BYND) Stack Up Against Its Peers?
BYND has an overall POWR Rating of F, equating to a Strong Sell rating. Therefore, one might want to consider investing in other Food Makers stocks with an A (Strong Buy) or B (Buy) rating, such as Grupo Bimbo, S.A.B. de C.V. (GRBMF), Industrias Bachoco, S.A.B. de C.V. (IBA), and Marfrig Global Foods S.A. (MRRTY).
BYND shares were trading at $23.73 per share on Friday morning, down $0.84 (-3.42%). Year-to-date, BYND has declined -63.58%, versus a -15.09% rise in the benchmark S&P 500 index during the same period.
About the Author: Dipanjan Banchur
Since he was in grade school, Dipanjan was interested in the stock market. This led to him obtaining a master’s degree in Finance and Accounting. Currently, as an investment analyst and financial journalist, Dipanjan has a strong interest in reading and analyzing emerging trends in financial markets.
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