Down 38% Since 2023, How Will Beyond Meat Stock Trend Post Q4 Results?

BYND: Beyond Meat logo
Beyond Meat

Beyond Meat stock (NASDAQ: BYND), a plant-based meat alternative company, is scheduled to report its fiscal fourth-quarter results on Tuesday, February 27. We expect BYND’s stock to likely to see little to no movement due to revenues beating but earnings missing expectations marginally  in its fourth-quarter results. BYND stock has dropped 38% since 2023, largely underperforming the broader indices, with the S&P growing about 32% over the same period. The company has been facing challenging revenue and considerable cash burn for about two years now. The company’s stock has declined thanks to the combination of inflation, pandemic-related shifts in demand, and rising competition. Beyond Meat’s stock remains under pressure as revenue continues to fall and solvency concerns persist. Several headwinds continue to pressure BYND stock going forward. In the U.S., the company’s distribution has maxed out, while inventory levels remain high. Moreover, the company is dealing with low utilization of plants, lower revenue per pound, and termination of co-manufacturing agreements. The company also has a substantial amount of debt in its capital structure, which may become a meaningful risk factor in the current high-interest rate environment. BYND has $1.1 billion in debt on its balance sheet and a limited cash runway of $232.8 million (down from $310 million at year-end 2022).

BYND stock has suffered a sharp decline of 95% from levels of $125 in early January 2021 to current levels now, vs. an increase of about 35% for the S&P 500 over this roughly 3-year period. Notably, BYND stock has underperformed the broader market in each of the last 3 years. Returns for the stock were -48% in 2021, -81% in 2022, and -28% in 2023. In comparison, returns for the S&P 500 have been 27% in 2021, -19% in 2022, and 24% in 2023 – indicating that BYND underperformed the S&P in 2021, 2022, and 2023. In fact, consistently beating the S&P 500 – in good times and bad – has been difficult over recent years for individual stocks; for heavyweights in the Consumer Staples sector including WMT, PG, and COST, and even for the megacap stars GOOG, TSLA, and MSFT. In contrast, the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has outperformed the S&P 500 each year over the same period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride as evident in HQ Portfolio performance metrics. Given the current uncertain macroeconomic environment with high oil prices and elevated interest rates, could BYND face a similar situation as it did in 2021, 2022, and 2023 and underperform the S&P over the next 12 months – or will it see a recovery?

Our forecast indicates that BYND’s valuation is $7 per share, which is 4.5% lower than the current market price. Look at our interactive dashboard analysis on Beyond Meat Earnings Preview: What To Expect in Fiscal Q4? for more details.

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(1) Revenues expected to come in slightly above consensus estimates

Trefis estimates BYND’s Q4 2023 revenues to be around $68 Mil, slightly above the consensus estimate. In Q3 2023, the company’s revenue of $75 million was down almost 9% year-over-year (y-o-y), driven by an 11.6% decrease in net revenue per pound, partially offset by a 3.5% increase in the volume of products sold. In addition, the company’s adjusted EBITDA came in at a loss of $57.5 million compared to a loss of $73.8 million in the year-ago period. Beyond Meat expects net revenues to be in the range of $330 million to $340 million in FY 2023, representing a decrease of approximately 21% to 19% compared to 2022. The company continues to expect operating expenses to be approximately $245 million or less, before one-time separation costs and potential savings associated with the company’s recent reduction in force.

2) EPS is also likely to miss consensus estimates marginally

BYND’s Q4 2023 earnings per share (EPS) is expected to come in at a loss of 93 cents per Trefis analysis, missing the consensus estimate slightly. In Q3, BYND’s net loss was $71 million. Beyond Meat’s gross margin turned negative in 2022 compared to its positive gross margins of 25% in 2021 and 30% in 2020. In fact, the company’s gross margins were still in the red with Q3 margins at -9.6% but still better than the year-ago levels. Q3 2022 gross margins stood at -18%. Lower manufacturing costs, lower materials costs, lower depreciation, and lower inventory reserves per pound helped this improvement. That said, the company has a heavy focus on marketing and promotional activities, which doesn’t bode well for its margins.

(3) Stock price estimate aligns with the current market price

Going by our BYND’s valuation, we expect a revenue per share (RPS) estimate of around $5.76 and a P/S multiple of 1.2x in fiscal 2023, translating into a price of $7, which is only 5% lower than the current market price. That said, the company’s stock appears appropriately priced at the current 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.

Returns Feb 2024
MTD [1]
Since start
of 2023 [1]
Total [2]
 BYND Return 15% -38% -90%
 S&P 500 Return 5% 32% 127%
 Trefis Reinforced Value Portfolio 2% 41% 623%

[1] Returns as of 2/23/2024
[2] Cumulative total returns since the end of 2016

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