Plant-based meat producer Beyond Meat Inc. (NASDAQ: BYND) has a 39.81% short interest. Sentiment is negative for the stock as it continues to fall lower, trading down more than 25% year-to-date (YTD). The stock recently provided investors with a fleeting lifeline, briefly jumping to $10.31 on a short-lived meme stock revival led by GameStop Co. (NYSE: GME) on May 14, 2024. Shares have since given back all the gains and tacked on more losses.
Beyond Meat operates in the consumer staples sector, competing with real meat and poultry producers like Tyson Foods Inc. (NYSE: TSN), Pilgrim’s Pride Co. (NASDAQ: PPC), and Hormel Foods Co. (NYSE: HRL).
BYND's Short Interest Could Spark a Short Squeeze for the Stock
There’s very little to be positive about Beyond Meat as sales continue to slip, losses grow, and market share contracts. With the stock getting closer to its all-time low of $5.58, investors wonder if there's any meat left in this stock. However, a 39.81% short interest could explode from even the smallest spark. The same holds for the stock, as a violent short squeeze can trigger as a result of any positive news.
Plant-Based Meat: A Stagnating Industry Losing Its Taste
The plant-based meat category peaked in 2021, moderated in 2022, and declined in 2023, driven by inflation, tightening consumer budgets, and weak consumer engagements, according to the Good Food Institute. In a survey asking why adults didn’t try plant-based meat products again, the primary reason was “I didn’t like the taste.” While prices have fallen for plant-based meat from being 67% more expensive than real meat in 2022, they haven’t reached parity.
Can Bird Flu Help Boost Beyond Meat's Sales? Not Likely
The continual spread of avian influenza in the headlines, prompting an uptick in Beyond Meat sales, has yet to be a valid thesis. While the instances of bird flu among humans can be counted on one hand, the destruction of the poultry population has resulted in the termination of more than 82 million birds in the United States since 2022. In April 2024, Cal-Maine Foods Inc. (NASDAQ CALM) announced the termination of 1.6 million egg-laying hens and 337,000 pullets at its facility in Parmer County, Texas. Beyond Meat sales have continued to drop during this period, so there’s not much credence to the bird flu having a positive impact on sales trends.
BYND Stock Triggers a Descending Triangle Breakdown
The daily candlestick chart on BYND illustrates a descending triangle breakdown pattern. BYND squeezed to $10.31 on the May 14, 2024, meme stock revival, but it only lasted a single day as shares fell right back down to the flat-bottom support trendline at $6.99. Subsequent bounce attempts peaked at lower highs, which formed the upper descending trendline resistance. The breakdown occurred when BYND stock fell below the $6.99 support. The daily relative strength index (RSI) fell to the 37-band. Pullback support levels are at $5.98, $5.58, $5.00, and $4.51.
Weak Metrics Plague Beyond Meat’s Q1 2024 Earnings Report
Beyond Meat reported a Q1 2024 EPS loss of 84 cents, missing consensus analyst estimates by 17 cents. Revenues fell 18% YoY to $75.6 million, slightly beating consensus estimates of $75.24 million.
Double-Digit Revenue Declines by Foodservice Channel
The U.S. retail channel net revenues fell 16% to $37.1 million due to decreased product volume. This indicated soft demand in addition to the discontinuation of Beyond Meat Jerky. The U.S. foodservice channel sales dropped 16.2% YoY to $12.3 million due to a 20.7% decrease in product volume, underscoring softening demand partially offset by a 5.8% increase in net revenue per pound.
International revenues dropped 12% YoY to $12.6 million due to a decrease in the volume of products sold, underscored by reduced sales of chicken products in the EU and soft demand in Canada. International foodservice revenues plunged 28.7% to $13.6 million due to decreased product volume and soft demand reflecting weaker burger and chicken products.
It's Going to Get Worse Before It Gets Better for Beyond Meat
Beyond Meat provided downside guidance for Q2 2024, with revenues expected between $85 million and $90 million, missing consensus estimates of $96.21 million. Full-year 2024 revenues were reaffirmed between $315 million and $345 million, compared to consensus estimates of $329.55 million.
Beyond Meat CEO Sees Glass as More Than Half Full
Beyond Meat CEO Ethan Brown some bullish aspects to the quarter, “In Q1, we made solid progress against our 2024 priorities, including: hitting our first quarter revenue objective; reducing operating expenses and cash consumption year-over-year; bringing production in-house to reduce costs and improve quality; and commencing shipments of Beyond IV, the fourth generation of Beyond Burger and Beyond Beef, to our customers, to the praise of nutritionists and consumers alike.”
Brown concluded, “Together with measures we are exploring to bolster our balance sheet, we continue to work to position 2024 as a pivotal year as we strive to achieve sustainable and profitable operations.”
Beyond Meat analyst ratings and price targets are at MarketBeat.
