What To Expect From Beyond Meat’s Stock Post Q3?

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Trefis
BYND: Beyond Meat logo
BYND
Beyond Meat

Beyond Meat stock (NASDAQ: BYND), a plant-based meat alternative company, is scheduled to report its fiscal third-quarter results on Wednesday, November 9. We expect BYND’s stock to likely see little to no movement due to revenues and earnings matching expectations in its third-quarter results. Down almost 80% this year from $65 to $13, 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 half of 2022. Things went from bad to worse, as its gross profit margin collapsed to a 4.2% loss in Q2 2022 compared to a 31.7% profit a year ago, and a positive gross profit margin of 0.2% in Q1 2022. Its weakness in the top line has also spread overseas, which is affected by inflationary pressures, even worse than the U.S.  Beyond Meat’s profitability has been in decline for years, and its net losses have quadrupled to $197.6 million through the first half of fiscal 2022. Additionally, new initiatives have not been successful. For the fiscal second quarter, Beyond Meat Jerky’s partnership with PepsiCo resulted in a loss of $7.7 million in gross profit.

The company could see its first-ever drop in annual sales in FY 2022. The company also announced it would lay off about 20% of its workforce. Lay-offs and cost cuts should help the company stabilize its near-term profitability, but we do not expect the company to break even any time soon.

Our forecast indicates that BYND’s valuation is $14 per share, which is almost in line with the current market price. Look at our interactive dashboard analysis on Beyond Meat Earnings Preview: What To Expect in Fiscal Q3? for more details.

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(1) Revenues expected to come in line with consensus estimates

Trefis estimates BYND’s Q3 2022 revenues to be around $98 Mil, matching the consensus estimate. In the first half of 2022, Beyond Meat’s revenue fell 0.4% year-over-year (y-o-y) to $256 million. Its U.S. revenue rose 2.4% to $186 million as the growth of its retail segment offset its declining food service business. However, international revenue fell 7.1% to $70 million as declining retail revenue offset the anemic growth of its food service segment. Beyond Meat’s total pounds sold actually increased 14.6% y-o-y in Q2 2022, but that volume growth was completely offset by a 14.2% decline in its net revenue per pound, largely due to liquidation sales and currency headwinds.

2) EPS is also likely to match consensus estimates

BYND’s Q3 2022 earnings per share (EPS) is expected to come in at a loss of $1.13 per Trefis analysis, in line with the consensus estimate. In Q2, BYND’s net loss was $97 million, or 66% of sales. That loss actually represents an improvement compared to the first quarter when losses reached over 90% of sales. The $1.53 per-share adjusted loss expanded materially from the $0.31 loss in the second quarter of 2021.

(3) Stock price estimate is appropriately priced to the current market price

We expect a revenue per share (RPS) estimate of around $7.16 and a P/S multiple of 1.9x in fiscal 2022, translating into a price of $14, which almost matches 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 Nov 2022
MTD [1]
2022
YTD [1]
2017-22
Total [2]
 BYND Return -15% -80% -82%
 S&P 500 Return -2% -20% 70%
 Trefis Multi-Strategy Portfolio -3% -25% 197%

[1] Month-to-date and year-to-date as of 11/8/2022
[2] Cumulative total returns since the end of 2016

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