TRADING
Wall Street Appetite for Beyond Meat Stock Erodes as Shorts Intensify Lackluster outlook for plantbased meat alternatives drives share price plummet
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By Andrew Moran
34 I N S I G H T January 21–27, 2022
Beyond Meat attributes the slowdown to pandemic-related uncertainty, moderating sales growth, weather conditions, and labor shortages. in Beyond is simply reaching a peak.” nues tumbled by 13.9 percent, driven by The company appears to agree, accord- weaker supermarket demand. The net ing to forecasts. loss totaled $54.8 million, or 87 cents per The maker of plant-based substitutes, share—worse than the $19.3 million, or including ground beef and chicken, 31 cents per share, loss in the previous is anticipating $85 million to $110 mil- fiscal year. lion in revenues during the fiscal fourth In addition to slumping demand, the quarter. If accurate, it would be down business has experienced swelling transfrom the $101.9 million in portation and warehousing revenues reported in the costs as well as rising invenprevious fiscal year. tory write-offs that have The California-based firm eaten into its profits. attributed the revision to Still, Beyond Meat leadBEYOND MEAT pandemic-related uncerers are confident about the shares have tainty, moderating sales company’s future. plummeted 52 growth, weather conditions, “Near-term market and percent over the and labor shortages. operating conditions notpast 12 months. In the third quarter, net withstanding, we remain sales for the company committed to our long-term advanced by 12.7 percent strategy,” Chief Executive to $106.4 million, falling short of the Ethan Brown said in a quarterly confermarket estimate of more than $109 ence call with analysts. million. Compared to the same period Beyond Meat has entered into partin the previous fiscal year, its U.S. reve- nerships with Tim Hortons in Canada,
52%
ANGELA WEISS/AFP VIA GETTY IMAGES
he beyond meat stock is struggling to withstand the invasion of short-sellers. Short interest climbed to about 36 percent of Beyond Meat’s free float, making it the most shorted business in the Russell 1000 index. This is up from 26 percent at the beginning of October 2021, and short interest is rising at an alarming rate for the producer of plant-based meat. This might be a justified strategy for the short bets, considering Beyond Meat’s disappointing stock performance, abysmal financials, and lackluster overall outlook in recent months. Its shares have plummeted by 52 percent over the past 12 months, falling below $67. A flurry of good news has supported the stock to kick off 2022, with a year-to-date gain of roughly 2 percent. Several brokerages have slashed their price targets on the stock. Based on 14 Wall Street analysts providing 12-month price targets in the past three months, Beyond Meat has a median target of $72. Many market analysts project that the vegan burger maker will continue to endure a slowdown. “We view the results as further evidence that Beyond’s business is reaching market saturation faster than expected and that the company has deeper problems that won’t be easy to fix,” Credit Suisse analyst Robert Moskow wrote in a note. “Consumer interest
