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Beyond Meat Reports Mixed Q2 Results; Shares Dip
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Beyond Meat Reports Mixed Q2 Results; Shares Dip

Plant-based meat provider Beyond Meat, Inc. (BYND) reported mixed second-quarter results, with a wider-than-expected loss and revenue beat. Following the earnings release, shares declined 4.5% in the after-hours trading session on August 5.

The company reported a quarterly loss of $0.31 per share, higher than analysts’ estimates of a $0.23 per share loss. In the prior-year quarter, Beyond Meat reported a loss of $0.16 per share.

That being said, net revenue for the quarter came in at $149.43 million, up 31.8% compared to the year-ago period, and outpaced the Street’s estimate of $142.62 million.

Revenue increased primarily due to a 218% year-over-year gain in foodservice channel sales, as demand picked up from the low levels seen in the year-ago period, which were hampered by the COVID-19 pandemic. (See Beyond Meat stock charts on TipRanks)

Additionally, retail channel sales recorded modest growth of 6.2% year-over-year. Notably, U.S. retail channel sales for the year-ago period benefitted from stockpiling due to the pandemic-created panic.

Sharing his thoughts, Ethan Brown, President and CEO of the company, said, “We continue to make substantial investments in our long-term growth here in the U.S. and abroad, maintaining our focus on building innovation, production, and team capabilities for the future…Coupled with the week-over-week progress we are seeing with our production capabilities in the EU and China, and our continued advancement of our overall cost-down program, I’m optimistic about what lies ahead.”

Though management anticipates continued recovery in foodservice channels, the team acknowledges the near-term uncertainty related to the COVID-19 situation. The company expects Q3 net revenue to land in the range of $120-$140 million, versus the consensus estimate of $153.7 million.

In response to the mixed results posted by Beyond Meat, Jefferies analyst Robert Dickerson maintained a Hold rating on the stock with a price target of $121.

Dickerson said, “The company’s portfolio of plant-based meats has allowed them to appeal to a broad range of consumers, including those who typically eat animal-based meats, positioning the company to compete directly in the $1.4 trillion global meat industry.”

Having said that, the analyst highlights certain headwinds that could affect the company’s performance going forward. These include limited margins due to pricing pressures, increased competition, and decreased repurchase rates as a result of lower acceptance of plant-based products in the long run.

Overall, the stock has a Hold consensus rating based on 2 Buys, 6 Holds, and 4 Sells. The average Beyond Meat price target of $118.67 implies 2.6% downside potential to current levels. Shares have lost 8.1% over the past year.

On top of this, TipRanks data shows that financial blogger opinions are 63% Bullish on BYND, compared to a sector average of 72%.

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