Beyond Meat Inc. (NASDAQ: $BYND) is an LA-based food company founded in 2009 that produces plant-based alternatives to red meat and ground beef. Their flagship products, Beyond Burger and Beyond Sausage, are made from pea protein and aim to perfectly replicate meat’s taste, texture, and aroma. Sold in over 80,000 outlets across the U.S., China, and Europe, Beyond Meat hopes to continue appealing to vegetarian and meat-eating consumers with Convincing plant-based alternatives.
The Company saw its stock skyrocket nearly 75% in extended trading on Tuesday, February 27, 2024, following the release of its fourth-quarter 2023 earnings report. While revenue for the quarter beat analyst estimates, Beyond Meat’s guidance for 2024 fell short of expectations.
However, the Company’s new strategic direction aimed at reducing costs and improving profitability was met positively by investors.
Q4 Financials: Beyond Meat’s Mixed Bag
Beyond Meat reported revenue of $73.7 million for Q4, surpassing the consensus estimate of $66.7 million. The Company’s net loss, including non-cash charges, was $155.1 million or $2.40 per share. Excluding non-cash charges of $95.6 million, Beyond Meat’s adjusted net loss was $0.92 per share, slightly worse than the $0.88 loss expected by analysts.
The revenue decline of 7.8% Y/Y was driven by a 14.6% decrease in net revenue per pound, partially offset by an 8% increase in volume sold. International sales volumes increased but were offset by weaker U.S. retail and food service demand. Operating expenses increased to $76.9 million, up from $62.8 million in Q4 2022.
Beyond Meat’s gross margin swung to a loss of $83.9 million in Q4 2023, compared to just $2.9 million in Q4 2022. It was heavily impacted by non-cash charges totaling $78 million, relating to inventory and assets deemed obsolete or inconsistent with Beyond Meat’s path to profitability.
For 2023, net revenues decreased 15% to $319.2 million. Beyond Meat incurred $107.8 million in operating expenses in fiscal year 2023, an improvement from $320.2 million the prior year.
Beyond Meat’s Operational Revamp in Q4
In the fourth quarter of 2023, Beyond Meat took several steps to accelerate the transition to a leaner operating structure. It involved enacting budget reductions of $70 million for 2024 and consolidating production.
The Company put the finishing touches on renovating core platforms like Beyond Burger to address misinformation. Extensive pricing analysis was conducted to support margin expansion. Inventory management continued to free up working capital. Investments remained focused on Europe, including expanded McDonald’s distribution.
BYND Stock Surges
Beyond Meat’s share price has surged by 41.62%, reaching $10.65, up from the previous day’s closing value of $7.52 at 11:49 AM EST on Wednesday, February 28. The Company has a market cap of $676.447 million, with 64.54 million shares outstanding.
Over the past 52 weeks, BYND stock has experienced a significant change of -55.61%. In comparison, the S&P500 52-week Change is 28.52%. Its 52-week high is recorded at $19.25, while the low is $5.58. The 50-Day Moving Average stands at $7.72, and the 200-Day Moving Average is $10.03.
2024 Outlook Disappoints Market Expectations
Beyond Meat enters 2024, focusing on driving efficiencies to work toward profitable growth after a transitional 2023. Executing the strategic plan, including Beyond IV’s launch, pricing changes, and manufacturing optimization, will be crucial to turning around recent revenue declines and returning gross margins to positive territory in the back half of the year.
For Q1 2024, Beyond Meat expects $70-75 million in revenue, far below the $88.6 million analysts predicted. It implies a sales decline of 19-24% Y/Y.
Full-year 2024 revenue is forecast at $315-345 million, shy of the $343.8 million consensus estimate. This outlook represents a decline of 8% on the low end.
Positively, the gross margin is expected to reach the mid-to-high teens in 2024 after coming in at -24.1% in 2023. Margin expansion is projected to accelerate in the second half as pricing and production changes take hold.
Beyond Meat 2024: Analysts’ Outlook & Challenges
Four Wall Street analysts have provided 12-month price targets for Beyond Meat in the last three months. The average price target is $6.75, reflecting a -37.03% change from the current price. Among analysts, three recommend selling BYND stocks, while one suggests holding.
Beyond Meat finds itself at a critical point in early 2024. Its vision of mainstream plant-based meat faces challenges from the economy and competition. The new Beyond Beef IV represents the latest attempt at innovation. However, high costs and extensive operations have hindered financial returns.
The restructuring plan aims to reduce cash burn while targeting long-term growth. However, recent results show Beyond Meat still faces a difficult road in 2024.
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