Beyond Meat (NASDAQ: BYND) has been a laggard this year, with its year-to-date performance currently sitting at -16.8%. Most of the drop has happened this week after the company reported less than stellar earnings slumping its share price about 13% since. The company reported revenues of $108.2 million, a 6.1% quarter-over-quarter increase, yet results came in lower than analysts’ estimates. The company reported a 30.2% gross margin and an ($0.43) earnings per share.
A few analysts changed their price targets on Beyond Meat, lowering its average 12-month target price from $128.80 to $120.87.
Canaccord Genuity was one of the investment banks to lower their 12-month price target on Beyond Meat to $125 from $155 and they reiterated their hold rating on the company. Bobby Burleson says that margins remained compressed this quarter due to a sustained investment cycle, mix-shift headwinds and COVID continued to impact the company. On the share price, he believes that the companies shares will remain range-bound until “a meaningful rebound in Foodservice materializes,” and adds, “We feel the near term set up warrants continued caution on the stock, as additional downward revisions to EBITDA may be required.”
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Beyond’s revenue of $108 million and EBITDA of ($10.8) million came in lower than Canaaccord’s estimates of $114.5 million and ($3.4) million respectively. Burleson says that the main driver as to why the company did not beat expectations was because of higher operating expenses and mix shift impact while operating costs grew due to an increase in production trial activities, higher shipping and freight costs, and an increased headcount. He writes, “The company remains caution and continues to refrain from providing full-year 2021 guidance.”
On a lighter note, The company does seem to be improving its market share and market penetration. Burleson writes, “its household penetration rate improved sequentially and Y/Y in Q1 by 10 and 100 bps, respectively, to 5.4%, while buyer rate, purchase frequency, and repeat rate all increased Q/Q and Y/Y.” Additionally, Beyond Meats market share is also up 16% year over year and continues to hold the #1 position based on dollar volume for broad-line distribution.
Below you can see Canaccord’s 2021-2022 estimate changes.
Information for this briefing was found via Sedar and Refinitiv. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
