Beyond Meat stock (NASDAQ: BYND), a plant-based meat alternative, is scheduled to report its fiscal first-quarter results on Wednesday, May 11. We expect BYND’s stock to trade higher due to revenues and earnings beating expectations in its first-quarter results. Down 67% in the last six months from $94 to $31, BYND’s stock price fall is one of the reasons why many investors are betting against this company as it saw disappointing results in the last two quarters. Despite a positive long-term outlook for plant-based meat, the company has also dropped due to inflation, rising bond yields, and massive overvaluation. However, if you think long-term, then this may be a good time to buy the dip. Beyond Meat is launching a series of products this year to convince consumers to try them and expects the demand trends to pick up. Recently, it launched the McPlant patty (across all McDonald’s U.S., U.K., and Ireland stores for its McPlant burger) and Beyond Meat Jerky. It also expanded the distribution of its Beyond Chicken Tender to 8,000 new grocery and big-box retailers – with a bigger aim to build on its success with Beyond Meat burger patties.
Beyond Meat’s management believes that their spending rates will subside substantially in 2022, and they can leverage the investments made in 2021. The company expects first-quarter revenue to rise 20% to 23% year-over-year (y-o-y). Growth in revenues should help the company improve its bottom line, as well. In order for the company to achieve these sales numbers, it will be necessary to gauge how consumers react to new products launching in the next few quarters. The company was focused on fast-food partnerships in 2021 over launching new retail products. So, a strategy reversal here could be a big challenge in the near term.
Our forecast indicates that BYND’s valuation is $46 per share, which is 48% higher than the current market price. Look at our interactive dashboard analysis on Beyond Meat Earnings Preview: What To Expect in Fiscal Q1? for more details.
(1) Revenues expected to be ahead of consensus estimates
Trefis estimates BYND’s Q1 2022 revenues to be around $119 Mil, well ahead of the consensus estimate. Beyond Meat’s Q4 report saw slumping demand at the supermarket and big-box retailers for its plant-based burgers and chicken products. Its revenue declined 1% year-over-year to $101 million, due to a 20% fall in U.S. retail sales. In 2021, the company reported annual revenue of $467 million,up 15% y-o-y with a net loss of $187 million (-$2.88 per share). For the full year of 2022, we forecast Beyond Meat’s Revenues to be $630 million, up 36% y-o-y.
2) EPS is also likely to be well ahead of consensus estimates
BYND’s Q1 2022 earnings per share (EPS) is expected to come in at a loss of 80 cents per Trefis analysis, above the consensus estimate. In Q4 2021, the company’s gross margin plunged 1080 basis points on a GAAP basis to 14% (mostly due to a one-time write-off). That said, the plant-based meat company seems to be moving forward with its growth spending. Its operating expenses grew 2x to $92 million, largely due to a big jump in SG&A spending. Consequently, the company’s net loss swelled to $80 million or $1.27 per share. It should be noted that the company reported $733 million in cash at the end of 2021, so it can still afford a couple of more quarters like this one.
(3) Stock price estimate higher than the current market price
Going by our Beyond Meat’s Valuation, with a revenue per share (RPS) estimate of around $9.97 and a P/S multiple of 4.6x in fiscal 2022, this translates into a price of $46, which is almost 48% higher than the current market price.
It is helpful to see how its peers stack up. BYND Peers shows how Beyond Meat’s stock compares against peers on metrics that matter. You will find other useful comparisons for companies across industries at Peer Comparisons.
|S&P 500 Return||-3%||-16%||78%|
|Trefis Multi-Strategy Portfolio||-7%||-23%||205%|
 Month-to-date and year-to-date as of 5/10/2022
 Cumulative total returns since the end of 2016