Beyond Meat (NASDAQ:BYND) disclosed an equity offering of up to $200 million of its common stock at the prevailing market bid or ask price. The announcement was made shortly after yesterday’s release of better-than-expected Q1 results. BYND stock declined by more than 2% in after-hours trading on Wednesday.
The offering may be made over the counter or through privately negotiated transactions. The money will be used for working capital and general corporate purposes. The sales agent for the offering will be Goldman Sachs (GS).
The company’s business is being impacted by persistently high inflation, which has been eroding consumers’ spending power. Because of this, Beyond Meat had to lower the price of its goods, which reduced its profitability.
In the recently reported first quarter, the company reported a loss of $0.92, with revenue declining 15.8% year-over-year to $92.2 million. Furthermore, Beyond Meat’s quarter-end cash balance has declined for the past five quarters to $258.6 million, against an outstanding debt balance of $1.1 billion.
Nevertheless, the business has been working to support its bottom line by implementing cost-control measures. Moreover, revenues from plant-based meat are expected to increase from $11 billion in 2022 to $33 billion in 2027, according to Statista. Therefore, the company has a tremendous growth opportunity ahead if it can strengthen its financial position.
What is the Price Target for BYND?
Following the earnings announcement yesterday, one analyst assigned a Hold rating to BYND stock while the other gave a Sell rating.
Overall, BYND stock has an average price target of $12.14 which implies a downside potential of 2.7% from the current level. Meanwhile, the Moderate Sell consensus rating for Beyond Meat is based on four Holds and five Sells. The stock is up about 1% so far in 2023.