Beyond Meat Stock Falls After Q3 Earnings: Analysts React To Mounting Losses, Slowing Growth

Beyond Meat Stock Falls After Q3 Earnings: Analysts React To Mounting Losses, Slowing Growth

Beyond Meat Inc BYND shares dropped plunged Thursday after the company reported a larger-than-expected loss and issued disappointing guidance for the fourth quarter.

Beyond Meat reported a third-quarter adjusted EPS loss of 87 cents on revenue of $106.4 million. Both numbers fell short of consensus analyst estimates of a 39-cent loss and $109.2 million in revenue. Revenue was up just 12.7% from a year ago.

U.S. revenue was down 13.9% from a year ago. Overall revenue was down compared to the second quarter. Beyond blamed higher transportation and warehousing costs, increased inventory write-offs and $1.9 million in water damage at one of its plants for the earnings miss.

Looking ahead, Beyond guided for a fourth-quarter EPS loss of 87 cents, more than double the 39-cent loss analysts had anticipated. Beyond also guided for fourth-quarter revenue of between $85 million and $110 million, well short of analyst estimates of $130.5 million.

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Voices From The Street: Credit Suisse analyst Robert Moscow said he is struggling to understand why Beyond Meat’s foodservice business has lagged so far behind the broad recovery in the U.S. foodservice industry.

“We view the results as further evidence that Beyond’s business is reaching market saturation faster than expected and that the company has deeper problems that won’t be easy to fix,” Moscow wrote.

Bank of America analyst Bryan Spillane said Beyond investors can’t expect the stock to maintain a growth stock multiple when its growth continues to slow.

“Among our biggest concerns is that it appears US demand/trial has continued to slow for plant-based protein options particularly in retail, while 2022 will be highly reliant on the rollout of McPlant at McDonald’s and other foodservice operators (Pizza Hut etc),” Spillane wrote.

Oppenheimer analyst Rupesh Parikh said investors should stay on the sidelines until Beyond demonstrates successful scaling of its foodservice business.

“We believed Street estimates have remained too aggressive in light of growing competition, execution challenges, and now more challenged category trends,” Parikh wrote.

Beyond Meat Ratings, Price Targets:

  • Credit Suisse has an Underperorm rating and lowered the price target from $75 to $60.
  • Bank of America has an Underperform rating and lowered the price target from $80 to $70. 
  • Oppenheimer has a Perform rating.
Posted In: Bank of AmericaBryan SpillaneCredit SuisseOppenheimerRobert MoscowRupesh ParikhAnalyst ColorEarningsNewsGuidancePrice TargetReiterationAnalyst RatingsMoversTrading Ideas