Beyond Meat (NASDAQ:BYND) is a company that’s based on an interesting concept that once captivated Wall Street. Yet, theory and practice are two different things. BYND stock can’t seem to get off the ground lately, and Beyond Meat’s lack of net earnings will probably continue to cause problems.
This is a shame, as this fake meat producer once had potential. Back in May 2019, Beyond Meat’s initial public offering was the biggest U.S. IPO since 2000. Shares soared 163% on their first day of public trading.
However, this initial burst of enthusiasm may have been based more on hype than hard data. Faux meat might be a high-conviction industry, but conviction hasn’t been enough to keep Beyond Meat’s shareholders in the green.
What’s Happening With BYND Stock?
BYND stock was worth over $200 at one point in time. At the beginning of 2022, shares were worth slightly more than $60. More recently, the stock traded in the low $30s.
There’s definitely a lesson to be learned here. Buying a stock during the early burst of hype can be bad for your financial health. Too many traders were counting on the the alternative meat category to explode in the coming years. This still might happen, but there’s scant evidence of it in Beyond Meat’s financial results.
CFRA analyst Arun Sundaram is an example of a Wall Street expert who’s puzzled by Beyond Meat’s business model, or more precisely, the company’s inability to implement this model:
I don’t really understand their strategy right now. They’re saying they have a vision where they’re introducing all kinds of plant-based meat products, but they don’t have the experience of scaling any individual product with the end goal of sustaining profits and cash flow.
A Big Nothing Burger
If you really want to get a taste of Beyond Meat’s problems, just check out the company’s most recently issued quarterly results. For the quarterly period ended April 2, 2022, Beyond Meat reported $109.46 million in revenue. Meanwhile, the company’s cost of goods sold was $109.27 million.
In other words, for the quarter, Beyond Meat’s gross profit was minuscule. Shockingly, just the cost of goods sold ate up most of the company’s quarterly revenue. It gets even worse, though.
Due to a variety of expenses, Beyond Meat incurred a quarterly net loss of $100.46 million. That’s substantially worse than the year-earlier net loss of $27.27 million. Thus, Beyond Meat’s financial hole only got deeper, and as a result, some traders may have chosen to sell BYND stock.
What You Can Do Now
Beyond Meat had its day in the sun on Wall Street, but that was three years ago. Today, investors have every reason to be frustrated with Beyond Meat’s poor results.
Holding and hoping, therefore, simply isn’t a viable strategy when it comes to BYND stock. It makes sense to stay away and find other stocks to satisfy your appetite for profits.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.