Beyond Meat (BYND) shares opened 20% higher on Tuesday as meme-stock enthusiasts continued piling into the plant-based meat alternatives company.
This retail-led surge pushed BYND’s relative strength index (RSI) into the late 70s, signaling overbought conditions that often precede a significant pullback.
Beyond Meat stock has pared back its intraday gains in recent hours, but remains up roughly 100% versus its year-to-date low.
What Triggered a Short Squeeze in BYND Shares Today?
BYND signed a massive distribution deal with Big Geyser for its newly launched Beyond Immerse protein water line and a nationwide rollout of breakfast sausages on April 21.
Retailer traders are pinning their hopes on Beyond Immerse, believing it could help the company transform into a broader lifestyle brand.
By entering the high-margin beverage sector, bulls hope Beyond Meat can diversify its way out of stagnant grocery aisle sales.
With short interest historically high, the positive news flow forced short-sellers to buy back shares to cover their positions, creating a feedback loop that sent BYND stock vertical this morning.
Should You Chase the Momentum in Beyond Meat Stock?
Beyond Meat’s fundamentals still suggest its meteoric run in recent weeks is a dead cat bounce, not a sustainable recovery.
The Nasdaq-listed firm is grappling with double-digit revenue declines, with a balance sheet that’s burdened with more than $400 million in long-term debt and negative shareholder equity.
Plus, insiders have predominantly sold Beyond Meat shares in the trailing 12 months, indicating a lack of confidence in the company’s prospects.
Investors should also note that despite an explosive move in April, BYND is still hovering around $1, which means the threat of a Nasdaq delisting also remains very real for this penny stock.
All in all, unless Beyond Immerse proves it can offset the structural decay in the core category, the stock remains a high-risk gamble for disciplined investors.
Beyond Meat Remains Sell-Rated Among Wall Street Firms
Wall Street also remains bearish on Beyond Meat Inc for the next 12 months.
The consensus rating on BYND shares sits at a “Moderate Sell” currently, with the mean price target of about $0.66, indicating potential downside of more than 40% from here.
