- Shares of Beyond Meat plunged 22% Tuesday after the plant-based burger maker reported a large revenue miss and slow sales growth in the third quarter.
- Beyond Meat reported net revenues of $94.4 million vs. $132.8 million expected by Wall Street, and a loss per share of 28 cents versus the estimated earnings per share of five cents.
- CEO Ken Goldman attributed the third quarter loss to consumers “freezer loading” in the second quarter at the onset of the pandemic.
- Analysts at JPMorgan said it’s unclear why the plant-based burger maker had such a weak third quarter.
- Investors were also confused about the scope of Beyond Meat’s collaboration with McDonald’s in launching the new “McPlant.”
- Watch Beyond Meat trade live here.
Shares of Beyond Meat plunged as much as 22% shortly after the Tuesday open after the plant-based burger maker reported a large revenue miss, slow sales growth, and a surprise loss in the third quarter.
Shares are trading at $116 as of Tuesday morning, Beyond Meta’s lowest level since May, after falling as much as 27% in pre-market hours.
The company on Monday afternoon reported net revenues for quarter of $94.4 million versus $132.8 million expected by Wall Street. This was a significant drop from its second quarter revenue at $113 million, which CEO Ethan Brown said was boosted by consumers “panic buying,” and having “freezer loaded” at the onset of the pandemic.
Analysts at JPMorgan led by Ken Goldman said it was unclear why the third quarter was so weak, and Beyond Meat’s explanation was not backed up by “meaningful data.”
“BYND mentioned nothing about freezer loading when reporting 2Q,” they said. “And we frankly have never really heard of freezer loading as a thing; typically it is much harder to pack a freezer than a pantry. Moreover, Beyond’s products are generally sold and stored fresh, not frozen. So we have a lot of questions about what actually happened to sales in 3Q.”
Despite the third quarter revenue miss, Beyond Meat’s year over year net revenue growth for the 9 months ending in September stands at 52.9%, up 116.5% for the same period a year ago.
However, the company also reported a surprise loss of 28 cents per share where analysts had estimated earnings per share of five cents.
Monday’s report came after a confusing day that saw Beyond’s stock whipsaw violently. Shares dropped 9% after McDonald’s announced it would be creating a plant-based burger, “crafted exclusively for McDonald’s by McDonald’s.” Investors were initially confused what Beyond Meat’s role would be, if any, but shares recovered after Beyond Meat clarified that it had collaborated on the new “McPlant.”
Details of the collaboration remain unclear.
JPMorgan said the partnership could be “very strong over time,” but they need more information about whether Beyond Meat will be manufacturing the “McPlant” and if the “McPlant” is a single product or broader platform before they can model McDonald’s impact on Beyond’s revenue and earnings.
JPMorgan holds an underweight rating for Beyond Meat and a price target of $104.
“In the long run, we believe BYND’s growth opportunity is impressive, and we see the company as well-positioned to keep a large share of the alt-meat pie. But with visibility so low and the most recent quarter surprisingly soft, we think it makes sense to stay Underweight,” said JPMorgan.
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