Once, plant-based meat maker Beyond Meat (BYND) was regarded as a huge possibility. The idea that someone could make a plant-based patty that looked, smelled, and even tasted like meat was a notion to conjure with. But that spell has broken, and Beyond Meat is now in a fight for its corporate life. Investors were encouraged by the struggle, though, and sent shares up nearly 3% in Monday afternoon’s trading.
Things looked great for Beyond Meat for a while. It represented an exciting alternative to meat that was not susceptible to disease, or required any sort of animal incarceration to make it happen. And, back in 2020, as the pandemic kicked off, it represented a way to actually find something like meat, as supply chain issues sent meat supply tumbling.
Yet the story did not work out quite that way. The stock, which once sold around $239 per share, is down around $3 per share today. Partnerships that were quick to fire up burnt out, and now, Beyond Meat finds itself trying to revamp its operations in a bid to win back customers who did not exactly find the early offerings palatable.
Like a Slaughterhouse Around Here
Calling Beyond Meat’s picture bleak seems oddly appropriate; reports suggest that the company currently looks to manage to break even in terms of earnings before interest, taxes, depreciation and amortization (EBITDA) by the end of 2026. Even if it manages to pull that off, reports note, that would still mean “…negative free cash flow…” for the company itself.
And with the sword of Damocles parked squarely over its head in the form of $1 billion in convertible bonds about to come due in March 2027, Beyond Meat may be on borrowed time. In fact, said convertible bonds are currently trading at around $0.17 on the dollar, reports note, as Beyond Meat’s odds of paying off its debt are vanishingly low.
Is Beyond Meat a Hold or Sell?
Turning to Wall Street, analysts have a Strong Sell consensus rating on BYND stock based on one Hold and four Sells assigned in the past three months, as indicated by the graphic below. After a 56.2% loss in its share price over the past year, the average BYND price target of $3.38 per share implies 1.17% downside risk.
