5 Reasons Beyond Meat Stock Could Mount A Juicy Comeback

In the late 2010s and early 2020s, Beyond Meat (BYND) experienced rapid growth that captivated both investors and consumers. Not only did the company extend a crucial partnership with grocery powerhouse Walmart  in 2021 but it expanded its presence at Costco, Kroger, and other notable players. 

Beyond Meat also opened in China its first end-to-end manufacturing facility outside of the US in 2021 to better capture market share in the fast growing Chinese market. 

However, times have changed. Initially listed at $25 per share during its May 2019 IPO, Beyond Meat’s stock soared over 150% on its debut. The stock’s momentum carried it to a peak of $234.90 on July 26, 2019, but it currently trades below $10. 

The momentum and excitement was short lived. Global demand for plant-based proteins didn’t meet expectations, and the market became crowded with competitors vying for a segment of a limited market. 

Currently, difficult economic conditions have led consumers to forsake more expensive faux proteins for more affordable protein options. 

As an early entrant in the market, Beyond Meat’s brand recognition remains strong, even if its stock performance is anything but. A resurgence in plant-based food sales and financial improvement could present an ideal opportunity for loyal Beyond Meat investors 

Here are five more reasons why BYND may not be trading in the single-digits for much longer: 

#1 Profitability Is Trending In The Right Direction 

Beyond Meat surpassed Wall Street forecasts in its Q4 earnings report. The company showed in late February quarterly revenue was down 8% year-over-year at $73.7 million. However, the company also showed its most favorable bottom-line results since Q2 2022. 

Additionally, an 8% rise in Q4 sales volumes signals increasing consumer demand for plant-based food options. 

Although management gave cautious 2024 revenue guidance, Beyond Meat stock jumped more than 30% on the report.  

The optimism for a rebound in demand, despite price increases, was one reason why investors started buying shares. Beyond Meat’s intensified focus on cost management is showing results. The company’s November 2023 workforce reduction by 8% is part of ongoing efforts to conserve funds. The decline in the cost of goods sold and R&D expenses in 2023 hints at potential margin improvements 

Analysts predict a notable improvement in Beyond Meat’s financials, forecasting a $2.30 per share net loss this year, significantly better than 2023’s $3.77 per share loss. The anticipated further reduction to a $1.87 per share net loss by 2025 suggests potential for recovery. Delivering on margin improvements could result in significant institutional investment dollars back into the stock. 

#2 Products Are Being Refreshed  

Beyond Meat continues to refine its product range to concentrate on its most lucrative core offerings and recently unveiled a new series of meat substitutes.   

The company recently launched the fourth generation of its Beyond Burger and Beyond Beef, touted as its closest match to real meat so far. These products, crafted with avocado oil, are marketed as being beneficial for heart health and is already shipping to grocery stores worldwide. 

Signs of consumer uptake for the refreshed product line could be the first step in revitalizing the company’s stock. Investors should look for signs of success in the upcoming first quarter earnings report. 

#3 Street Price Targets Are Increasing  

Although no sell-side research firm has yet recommended buying Beyond Meat stock, there’s a noticeable uptick in some of their price targets. This trend could indicate a growing analyst confidence in the company, possibly leading up to upgrades should Beyond Meat capitalize on any momentum. 

Following Beyond Meat’s Q4 earnings report, Canaccord increased its price target from $7.50 to $9.00, attributing the incrementally bullish stance to the company’s strong international growth.  

Similarly, TD Cowen lifted its target from $5.00 to $10.00, highlighting the 2024 outlook for reduced operating expenses and cash usage, alongside price rises. Despite skepticism from many analysts, who foresee the stock falling below $5.00, there’s a discernible shift towards a more positive outlook. 

#4 BYND’s Chart Is Also Looking More Bullish  

When BYND ran as high as $12.12 on February 28th, daily trading volume was 44.7 million shares — 13x the 90-day average. Volume on the pullback since has been relatively light suggesting that at least for now, bulls are in control. Plus, with BYND getting support from a double bottom pattern at the $6.00 level, there may be more upside than downside here.  

#5 Short Squeeze Potential Is Huge  

Lastly, a substantial 37% of Beyond Meat’s float, or 60.5 million shares, is shorted, ranking it as the fifth highest shorted small cap on the Nasdaq. This situation could prime Beyond Meat for a dramatic short squeeze, reminiscent of the meme stock days.