Valued at $382.8 million by market cap, Beyond Meat (BYND) has burnt massive investor wealth since its IPO in 2019. The vegan food stock surged to a record high of $235 in July 2019 and currently trades 97.6% below all-time highs, around $5.62 per share.
BYND's technical underperformance has continued into 2024 - but the stock has gained some momentum following its Q2 results, up about 6% over the past week.
Let’s see if BYND stock is a buy under $10.
How Did Beyond Meat Perform in Q2 of 2024?
In Q2 of 2024, Beyond Meat reported revenue of $93.2 million and a net loss of $34.5 million, or $0.53 per share. While revenue was down 8.8% year over year, it surpassed estimates of $88 million, and its losses were in line with consensus forecasts. Further, the company’s gross margin widened to a record 14.7%, driving BYND shares higher in the process. In fact, the company’s gross profits surged from $2.27 million to $13.71 million over the last four quarters.
During the earnings call, BYND CEO Ethan Walden Brown said, “Importantly, we expect to see further gross margin progress across the balance of the year, reflecting the combined impact of more fully distributed pricing adjustments, continued moderation of promotional spending and ongoing COGS improvements as we consolidate our network and continue on our lean management journey.”
Beyond Meat scaled back on promotional trade discounts and raised prices on certain products in the U.S., increasing its net revenue per pound. Moreover, its operating expenses in Q2 fell to $47.6 million, down $8.4 million year over year, as it continues to focus on cost efficiencies. The company's cash consumption in Q2 stood at $15.5 million in Q2, down 67% from the year-ago period.
Beyond Meat is Cutting Costs
Beyond Meat is aggressively cutting costs across business segments as it focuses on prudently managing cash and turning cash flow positive in the near future. Despite lower sales, BYND increased gross profits by $11.4 million and reduced operating expenses by $8.4 million compared to the year-ago period. Further, inventory and cash consumption were down annually as well as sequentially. In the last six months, Beyond Meat’s operating expenses fell by $22.6 million, after excluding a class action settlement accrued in Q1. To support its cost management efforts, Beyond Meat will narrow its focus on key products and markets.
The Beyond IV campaign was officially launched in Q2, marking the culmination of a multiyear renovation effort resulting in a clearer product strategy. Finally, Beyond Meat is maintaining its investment focus in Europe by serving strategic customers as it aims to gain market share in the plant-based meat business. For instance, in May, McDonald’s (MCD) Germany kicked off its meal promotion with a campaign featuring meals built around the McPlant Burger and McPlant Nuggets.
What's the Forecast for BYND Stock?
Out of 13 analysts covering Beyond Meat stock, seven recommend “hold,” and six recommend “strong sell,” with not a single “buy” recommendation.
The average target price for BYND stock is $5.72, which is nearly flat with Tuesday's closing price.
Despite its narrower loss in Q2, Beyond Meat is forecast to report a loss per share of $2.17 in 2024, and $1.63 in 2025. The company ended Q2 with a cash balance of $145 million, which means it will have to raise capital by the end of 2026 if profit margins remain negative, making it a high-risk investment right now.
On the date of publication, Aditya Raghunath did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
