Penny stock Beyond Meat (BYND) said it expects third-quarter revenue of $70 million, slightly above analyst estimates of $68.7 million. The announcement comes as the plant-based meat maker’s stock has skyrocketed nearly 240% over the past five days, driven by retail traders and renewed interest in heavily shorted stocks. Following the news, BYND stock was down 11% on Friday.
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The expected figure is within its previously guided range of $68 million to $73 million. However, it is down from $81 million in the same period last year, pointing to continued softness in demand.
Legal Costs and Impairment Weigh on Outlook
Further, Beyond Meat projects gross margins of 10% to 11%, including about $1.7 million in costs tied to its suspended operations in China. Also, adjusted margins are expected to land between 12% and 13%, reflecting a modest improvement in cost control.
The company also disclosed it will record a material non-cash impairment charge related to long-lived assets, though the exact amount was not disclosed.
Operating expenses are expected to be $41 million to $43 million, including $2 million in certain one-time costs. These costs stem from legal fees related to a dispute with a former co-manufacturer, retention program amortization, and partial lease termination expense at its headquarters.
While Beyond Meat’s Q3 revenue beat is a small positive, investors would want more details about its China exit, asset write-downs, and future growth. The Q3 earnings report, due on November 4, is likely to provide more clarity.
What Is the Future of BYND Stock?
Turning to Wall Street, BYND stock has a Moderate Sell consensus rating based on three Holds and five Sells assigned in the last three months. At $2.08, the average Beyond Meat stock price target implies a 19.38% downside risk.
