Will Beyond Meat Stock See Further Declines?

Beyond Meat stock (NASDAQ
NDAQ
: BYND), a plant-based meat alternative company, is scheduled to report its fiscal second-quarter results on Monday, August 7. We expect BYND’s stock to likely trade lower due to revenues and earnings missing expectations in its second-quarter results. Up almost 30% this year from $12 to $16, the company’s stock has managed to grow amid a combination of inflation, pandemic-related shifts in demand, and rising competition. But still, Beyond Meat’s
BYND
stock remains under pressure as revenue continues to fall and solvency concerns persist. There are a number of headwinds that 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 $258.6 million (down from $310 million at year-end 2022). BYND is guiding toward a $375-$415 million revenue in 2023, implying a 1% to 10% year-over-year (y-o-y) drop. That said, the company’s revenue growth is expected to accelerate in the second half due to the introduction of new products, distribution expansion, and weaker year-ago comparisons.

Our forecast indicates that BYND’s valuation is $11 per share, which is almost 29% 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.