Beyond Meat stock (NASDAQ: BYND) has dropped almost 50% in the last six months and currently trades at $127 per share. A major part of this decline has come in July 2021, mainly due to caution on the part of investors on the foodservice sector amidst resurgence in Covid-positive cases. The spread of the Delta variant has also led to fear and uncertainty regarding re-imposition of lockdowns. Beyond Meat recently announced the launch of its new plant-based chicken tenders at restaurants in the U.S. If the cases continue to rise and some form of lockdowns are reimposed, it will lead to supply bottlenecks and reduced demand for these new products, thus affecting the company’s top line growth. Also, there are some concerns regarding the company’s profitability. In Q2 2021, despite revenues rising 32% y-o-y, net loss almost doubled from $10.2 million to $19.7 million on account of higher R&D expenses. With continued high investment in R&D, investors are worried that another Covid-19 wave will take a toll on the company’s foodservice division, with top line growth being affected even as the company continues to incur higher expenses. But will BYND’s stock continue its downward trajectory over the coming weeks, or is a recovery in the stock more likely?
We believe this is likely to be a temporary stumbling block. According to the Trefis Machine Learning Engine, which identifies trends in a company’s stock price data for the last two years, returns for BYND stock average 63% in the next three-month (63 trading days) period after experiencing a 49% drop over the previous six-months (126 trading days) period. Also, there is a 56% probability that the stock will give a positive return in the next three months. But how would these numbers change if you are interested in holding BYND stock for a shorter or a longer time period? You can test the answer and many other combinations on the Trefis Machine Learning Engine to test BYND stock chances of a rise after a fall and vice versa. You can test the chance of recovery over different time intervals of a quarter, month, or even just one day!
MACHINE LEARNING ENGINE – try it yourself:
IF BYND stock moved by -5% over five trading days, THEN over the next 21 trading days, BYND stock moves an average of about 2.6 percent. Also, there is a 42% chance that the stock will give positive return in the next one month following a 5% drop over the previous week.
Some Fun Scenarios, FAQs & Making Sense of BYND Stock Movements:
Question 1: Is the average return for Beyond Meat stock higher after a drop?
Consider two situations,
Case 1: Beyond Meat stock drops by -5% or more in a week
Case 2: Beyond Meat stock rises by 5% or more in a week
Is the average return for Beyond Meat stock higher over the subsequent month after Case 1 or Case 2?
BYND stock fares better after Case 2, with an average return of 2.4% over the next month (21 trading days) under Case 1 (where the stock has just suffered a 5% loss over the previous week), versus, an average return of 10.3% for Case 2.
In comparison, the S&P 500 has an average return of 3.1% over the next 21 trading days under Case 1, and an average return of just 0.5% for Case 2 as detailed in our dashboard that details the average return for the S&P 500 after a fall or rise.
Try the Trefis machine learning engine above to see for yourself how Beyond Meat stock is likely to behave after any specific gain or loss over a period.
Question 2: Does patience pay?
If you buy and hold Beyond Meat stock, the expectation is over time the near-term fluctuations will cancel out, and the long-term positive trend will favor you – at least if the company is otherwise strong.
Overall, according to data and Trefis machine learning engine’s calculations, patience absolutely pays for most stocks!
For BYND stock, the returns over the next N days after a -5% change over the last five trading days is detailed in the table below, along with the returns for the S&P500:
Question 3: What about the average return after a rise if you wait for a while?
The average return after a rise is understandably lower than after a fall as detailed in the previous question. Interestingly, though, if a stock has gained over the last few days, you would do better to avoid short-term bets for most stocks – although BYND stock appears to be an exception to this general observation.
BYND’s returns over the next N days after a 5% change over the last five trading days is detailed in the table below, along with the returns for the S&P500:
It’s pretty powerful to test the trend for yourself for Beyond Meat stock by changing the inputs in the charts above.
What if you’re looking for a more balanced portfolio instead? Here’s a high-quality portfolio that’s beaten the market since 2016.