2 Beyond Meat Analysts On Q4 Results: 'Significant Downside Exists'

Plant-based food maker Beyond Meat Inc BYND reported fourth-quarter results Thusday that showed "solid" momentum, but its near-term outlook remains unclear, according to Piper Sandler.

The Beyond Meat Analysts

Piper Sandler's Michael Lavery maintaied a Neutral rating on Beyond Meat with a $115 price target.

Tigress Financial Partners analyst Ivan Feinseth.

The Beyond Meat Thesis

Beyond Meat reported fourth-quarter revenue of $98.5 million versus the research firm's estimates of $84.8 million and the consensus estimate of $81.2 million, Lavery said in a note.

Retail sales did fall short of estimates by $6.6 million, but this was offset by a $20.3-million beat in restaurant and food service revenue. The adjusted EBITDA of $9.5 million was ahead of the research firm's $6.8-million estimate and the Street's estimate of $6.1 million.

The quarter also showed that Beyond Meat expanded its worldwide distribution from 58,000 outlets in the third quarter to around 77,000, the analyst said.

The company said it has seen 46% repeat purchase rates in retail.

Despite some positive momentum, the company still faces a perception issue, based on Piper Sandler's survey of 3,500 adults. When asked "do you consume plant-based meat?" the most common answer from 62% of respondents was "no, and I am not interested in it."

Among the respondents who said they do eat plant-based meat, only 9% said Beyond Meat is their preferred brand and 32% have no brand loyalty.

See Also: Beyond Meat Facing Increased Competition As Demand Heats Up

Market Wanted More From Beyond Meat, Says Tigress Financial 

Investors wanted to see Beyond Meat show more than just a sales beat in the fourth quarter, Feinseth wrote. 

The company's report also disappointed investors, as it looks like there is "little follow-through" to its early success, he said.

A big part of the company's success in its early days was due to people trying its products out of curiosity, Feinseth said. 

Looking forward, competition in the plant-based food space will intensify, especially among big food companies investing in their R&D, he said. 

Beyond Meat may be forced to lower prices to remain competitive against traditional beef burgers and other plant-based food items, he said. 

"I believe significant downside exists and would continue to avoid the stock." 

BYND Price Action

Beyond Meat shares were down 17.28% at $87.80 at the time of publication Friday. 

Photo courtesy of Beyond Meat.