Beyond Meat: Investors Anxious To See Q4 Results As Company Struggles To 'Make Ends Meat'

Alternative meats company Beyond Meat Inc (NASDAQ:BYND) will release fourth-quarter earnings at 5 p.m. EST on Thursday, as investors and analysts wonder if the company can survive past this year.

Street estimates from Zacks put quarterly revenues at $78.4 million, which would mean a 22.1% yearly decline from the same quarter last year.

Once a fan-favorite, Beyond Meat is struggling to "make ends meat." Shares have enjoyed a small revival since the beginning of the year, currently up 36% since Jan. 1, to reach $16.8 at the time of this writing.

But the company has seen better times. The stock peaked at $234 shortly after going public in 2019. From mid-2020 to mid-2021, shares gravitated between $125 and $195, averaging prices of about 10x the current price.

Since July 2021, Beyond Meat shares have lost 88.6% of their value.

At its current cash burn and without new financing, Beyond Meat might not make it past this year. Famed short-seller Jim Chanos recently said the company is heading for bankruptcy, though the stock has lost short interest since improving this year.

Seeking Alpha analyst Harrison Schwartz partly agreed with Chanos' statement, calling "2023 is the ‘make or break' year for the company."

This year the company needs to prove to investors it can become consistently profitable, but operational hardships and consistent losses might make this impossible in the medium term.

The company's operations and revenue have been struggling since July 2021, consistent with the initial date of its stock's nosedive. Gross profit margin has been falling steadily in inverse relationship to the rising cost of its products.

To make its meat substitutes, Beyond Meat's operations are process-intensive and require many different ingredients, which makes the company especially ripe to suffer from current supply chain disruptions happening since the COVID-19 pandemic and exacerbated by the Russia-Ukraine conflict.

The company suffers from a weak consumer base, and it has failed to fulfill its promise to replace meat, as its products are still more expensive than traditional meat and are not perceived as healthier, said Schwartz.

Inflation and rising consumer costs are serving as a coup de grâce for the company, as consumers are less likely than ever to spend a premium on more expensive supermarket products.

But the company is not expected to go bankrupt soon, as it still had $605 million in working capital by the end of the third quarter.

"If Beyond Meat can slow its burn rate, it may survive long enough to consolidate and re-focus sufficiently to become a profitable enterprise," wrote the analyst.

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