As analysts worry about its long-term growth, Beyond Meat’s stock price plummeted

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In this photo illustration, a pack of Beyond Meat “The Beyond Burger” sits on a table in New York City on June 13, 2019.

Drew Unger | Getty Images

As Wall Street expressed doubts about the company’s growth prospects, Beyond Meat’s stock price plummeted by 17% in premarket trading on Thursday.

The plant-based meat manufacturer reported disappointing third-quarter results after the close on Wednesday. Even after the company issued a warning last month, its losses were greater than expected, and its revenue was lower than expected. Beyond also issued a pessimistic outlook, indicating that sales will not pick up immediately.

Jeffries called it “the season that might crush the camel.” Bernstein analyst Alexia Howard downgraded the stock and told investors not to buy on dips.

Credit Suisse analyst Robert Moscow wrote in a report: “We believe these results further prove that Beyond’s business reaches market saturation faster than expected, and that the company has deeper problems that are not easy to solve.”

Beyond blamed its weak quarter on many factors, including severe weather, delta variants and workforce challenges at restaurants. CEO Ethan Brown told investors that the problem is mainly short-term.

However, analysts are more skeptical. JP Morgan’s Ken Goldman quoted Maple Leaf Foods CEO Michael McCain as saying that he told investors last week that the company’s plant protein category had “significantly slowed down,” which may indicate a shift in the industry’s expected high growth rate.

“We are still not sure who is right — beyond meat or maple leaf foods — but when we hear such comments, it is difficult to have full confidence in the future of this category,” Goldman wrote.

Brown also said on Wednesday night that he is optimistic about 2022. But the company did not convince analysts that this is true. Bank of America Securities analyst Bryan Spillane wrote in a report that next year’s performance will largely depend on the launch of McDonald’s McPlant Burger and its partnership with other national chains, such as Yum’s Pizza Hut. McDonald’s is currently conducting operational tests on McPlant in a few American restaurants and has begun to sell this burger in some international markets.

Spillane also said that one area of ​​concern is the slowdown in testing and demand for meat alternatives in the United States, especially in grocery stores.

Jefferies analyst Rob Dickerson predicts that the stock may continue to be under pressure until there is a better understanding of the long-term development of plant-based meats, consumption rates and competitive landscape. Including Thursday’s plunge, Beyond’s stock price has fallen 38% this year, with a market value of $4.88 billion.


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