Beyond Meat Sinks 22% As 3Q Disappoints; Street Sticks To Hold

Shares of Beyond Meat plunged 22.4% in Monday’s extended trading session after the plant-based meat manufacturer reported 3Q results that fell short of analysts’ expectations. The company posted an adjusted loss per share of $0.28, while Wall Street had projected adjusted EPS of $0.05.

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Beyond Meat’s (BYND) 3Q sales of $94.4 million missed Street estimates of $132.8 million. Meanwhile, quarterly revenues improved by 2.7% year-over-year.

Beyond Meat CEO Ethan Brown said, “Our financial results reflect a quarter where for the first time since the pandemic began, we experienced the full brunt and unpredictability of COVID-19 on our net revenues and accordingly, throughout our P&L. Unlike the second quarter where record retail buying and freezer loading by consumers offset the deterioration of our foodservice business as COVID-19 stay-at-home and related measures set in, the long tail of retail stockpiling by consumers, coupled with continued challenges across the majority of our foodservice customers, led to Q3 results that were lower than we expected.” (See BYND stock analysis on TipRanks).

Following 3Q results, Oppenheimer analyst Rupesh Parikh maintained a Hold rating on the stock. In a note to investors, Parikh wrote, “We overall look quite favorably upon the Beyond Meat brand, product assortment, track record of innovation, longer-term prospects, and positioning to the very on-trend alternative meat category. In the near term, we expect coronavirus to weigh upon BYND’s restaurant and foodservice results. The more difficult foodservice conditions post Q1 coupled with a now elevated valuation keep us sidelined.”

Currently, the rest of the Street shares Parikh’s outlook. The Hold analyst consensus is based on 6 Holds, 2 Buys and 4 Sells. With shares up about 99% year-to-date, the average price target of $146.22 now implies downside potential of about 2.8% to current levels.