Beyond Meat Stock To Trade Lower Post Q2?

BYND: Beyond Meat logo
Beyond Meat

Beyond Meat stock (NASDAQ: BYND), a plant-based meat alternative company, is scheduled to report its fiscal second-quarter results on Thursday, August 4. We expect BYND’s stock to trade lower due to revenues and earnings missing expectations in its second-quarter results. Down almost 50% this year from $65 to $33, 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 first quarter. Things went from bad to worse, as its gross profit margin of 0.2% was far worse than the 30.2% recorded in the prior-year quarter. To add to this, a lack of profit guidance has some investors concerned that there could be more suffering in store for the bottom line in the upcoming Q2.

The company is guiding for full-year revenue in a range of $560 million to $620 million, which would represent a growth of 27% at the midpoint of its guidance. On a positive note, management maintained its full-year forecast, suggesting the pressure might be short-lived.

Our forecast indicates that BYND’s valuation is $25 per share, which is 26% lower than the current market price. Look at our interactive dashboard analysis on Beyond Meat Earnings Preview: What To Expect in Fiscal Q2? for more details.

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(1) Revenues expected to be slightly below consensus estimates

Trefis estimates BYND’s Q2 2022 revenues to be around $148 Mil, slightly below the consensus estimate. Beyond Meat reported revenue of $109.5 million, only up 1.2% year-over-year (y-o-y). It should be noted that BYND’s total volume of products increased 12.4%, but it was offset by a 10% decline in the price per pound during Q1.

2) EPS is also likely to miss consensus estimates

BYND’s Q2 2022 earnings per share (EPS) is expected to come in at a loss of $1.30 per Trefis analysis, missing the consensus estimate. The plant-based meat company seems to continue moving forward with its growth spending. Its operating expenses grew by a large 70% to almost $98 million, largely due to a big jump in SG&A spending. Consequently, the company’s net loss swelled to $100.5 million or $1.58 per share from a loss of $27.3 million or $0.43 per share in the year-ago quarter. It should be noted that the company reported $548 million in cash at the end of Q1 2022, so it can still afford a couple of more quarters like this one.

(3) Stock price estimate much lower than the current market price

Going by our Beyond Meat’s Valuation, with a revenue per share (RPS) estimate of around $9.00 and a P/S multiple of 2.8x in fiscal 2022, this translates into a price of $25, which is almost 26% lower 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.

What if you’re looking for a more balanced portfolio instead? Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016.

 Returns Aug 2022
MTD [1]
YTD [1]
Total [2]
 BYND Return 4% -49% -56%
 S&P 500 Return -1% -14% 83%
 Trefis Multi-Strategy Portfolio 0% -13% 242%

[1] Month-to-date and year-to-date as of 8/2/2022

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