As the demand for vegan alternatives to meat products grows, Beyond Meat’s (BYND) innovative business model has allowed them to reach the market. However, the lack of profitability and high valuation of the company have generated significant concerns from investors about their prospects. In addition, analysts ’poor valuations make the short-term outlook for stocks look bleak. Therefore, we believe that stock is best avoided now. Keep reading.
Beyond Meat, Inc. (BYND) is a leading vegetable protein company that offers a portfolio of revolutionary vegetable proteins created from basic ingredients that do not include GMOs, bioengineering chemicals, hormones, antibiotics or cholesterol. The company’s shares have risen 46.2% over the past month.
However, shares have fallen 72.2% over the past year and 46.8% to date to close their last trading session at $ 34.68. In addition, the shares are currently trading below their 52-week high of $ 134.99, which reached August 10, 2021.
According to Piper Sandler analyst Michael Lavery, Beyond Meat’s retail sales growth continues to slow, and the new jerky’s initial success is “masking a further acceleration of falls for the rest of its portfolio.” .
Also last month, BTIG analyst Peter Saleh warned customers about BYND’s partnership with McDonald’s Corporation (MCD). BYND is a partner in McDonald’s McPlant burger, which, according to Saleh, doesn’t go well for him. As a result, the analyst doubts McPlant will be on the U.S. McDonald’s national menu later this year.
This is what could shape BYND’s performance in the short term:
In terms of EV / forward sales, the stock is currently trading at 4.96 times, 176.5% more than the industry average of 1.80 times. In addition, its term price / sales of 3.89x is 229.9% higher than the industry average of 1.18x. In addition, BYND’s price / 12-month book of 53.76 times is 1996.6% higher than the industry average of 2.56 times.
BYND’s revenue increased 1.19% year-over-year to $ 109.46 million during the first quarter ended April 2, 2022. Its operating loss grew 296.1% since value from the previous year to $ 97.62 million. The company’s net loss increased 268.4% from the previous year’s quarter to $ 100.46 million. In addition, its net cash used in operating activities amounted to $ 165.21 million, representing a year-on-year increase of 438.9%.
Negative profit margins
BYND at the end of 12 months gross profit margin of 18.2% is 44.1% lower than the industry average of 32.5%. In addition, their 12-month ROA, ROC and net income margin are negative of 19.7%, 11.1% and 54.8%, respectively. In addition, its negative EBITDA margin at the end of the 12 months of 44.5% compared to the sector average of 12.1%.
Consensus rating and price targeting indicate a possible disadvantage
Of the 11 Wall Street analysts who rated BYND, four rated it as Sale and seven rated it Hold. The 12-month average target price of $ 24.38 indicates a 29.7% potential disadvantage. Price targets range from a minimum of $ 14.00 to a maximum of $ 44.00.
POWR ratings reflect a bleak outlook
BYND has an overall F rating, which equates to a strong sale on our property POWR ratings system. POWR scores are calculated taking into account 118 different factors, with each factor weighted to an optimal degree.
Our own rating system also evaluates each value based on eight different categories. BYND has an F for stability and feeling. The 1.65 stock beta is consistent with the degree of stability. In addition, the consensus rating and price targets are synchronized with the Sentiment note.
Of the 86 actions in classification B Food manufacturers industry, BYND ranks last.
Beyond what I said earlier, you can see BYND scores for Value, Growth, Momentum and Quality here.
BYND’s growing losses and poor consensus price estimates are worrisome. In addition, analysts expect their EPS to decline by 277.4% in the current quarter ending June 2022 and 55.7% during the current fiscal year. Therefore, we believe that stock is best avoided now.
How does Beyond Meat Inc. compare? (BYND) with your peers?
Although BYND has an overall rating of F, you might want to consider your industry peers, Industrias Bachoco SAB de CV (IBA), JBS SA (JBSAY), and Sanderson Farms Inc. (SAFM), which have an overall rating of A (Strong Purchase).
BYND shares rose $ 0.77 (+ 2.22%) in pre-market trading on Tuesday. To date, BYND has fallen -46.78%, compared to a -18.98% increase in the S&P 500 benchmark during the same period.
About the author: Pragya Pandey
Pragya is an equity research analyst and financial journalist with a passion for investing. She majored in finance at the university and is currently pursuing the CFA program and is a Level II candidate.
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