Since its start over 10 years ago, Beyond Meat (BYND) has emerged as a leader in plant-based meat alternatives. The vegan meat company’s product line can now be found in 119,000 retail and food service locations in more than 80 countries. After its May 2019 IPO launch, BYND stock rocketed 859% to all-time highs a few months later. Its trading history has been rocky since.
News of a big distribution deal in January 2021 provided a temporary boost for Beyond stock. The vegan meat maker also briefly joined the meme stock rally in May. But is BYND stock a buy now? It’s key to analyze the vegan meat company’s fundamental and technical picture first.
Beyond Plummets After Earnings Miss
BYND stock fell roughly 20% after a Q3 earnings miss on Nov. 10. Beyond Meat reported a loss of 87 cents per share on revenue of $106.4 million. Wall Street expected a loss of 37 cents and $109.2 million in revenue, according to FactSet data. But the vegan meat maker had warned on Oct. 22 that sales would be lower due to distribution factors and labor shortages.
“Our third quarter results reflect variability as we saw a decline from record net revenues just a quarter ago,” CEO Ethan Brown said in a Nov. 10 news release. “Despite current disruptions, we remain focused on rapidly advancing key building blocks of long-term growth.”
Though net revenues did increase slightly to 12.7% year over year, there does appear to be a slowdown in consumer demand. CEO Brown reflected on the Nov. 10 earnings call that most customers might not be understanding the “benefits of our products.” He added that Beyond’s five-year partnership with Stanford University would provide health data the company could use to market more effectively to consumers.
Shares Down After Rival’s Veggie Chicken Launch
BYND stock fell more than 1% on Sept. 7, after Impossible Foods announced the launch of a new chicken meat alternative. Impossible’s meatless chicken nuggets arrived in restaurants and grocery stores in late September.
Beyond Meat announced its own chicken product in July. The company previously launched plant-based chicken strips in 2012, only to discontinue them a few years later. Over 400 restaurants nationwide will offer new Beyond Meat chicken menu items.
The return of Beyond’s chicken line was followed by news on July 13 that fast-food eatery Panda Express will pilot plant-based chicken items. Since July 26, customers in select California and New York locations are now able find Beyond Meat orange chicken on the menu.
Beyond also announced a partnership with Pizza Hut in August. The vegan meat maker will test plant-based pepperoni products with the Yum Brands (YUM) pizza chain. Beyond Meat previously worked with Pizza Hut to create a vegan Italian sausage pizza that was discontinued in 2020.
Key Partnerships Lift BYND Stock
BYND stock isn’t in a sustained uptrend, but it’s seen temporary boosts alongside partnership announcements. Shares jumped more than 5% on June 28 after the company announced a partnership with DoorDash (DASH). The food delivery app offered limited-edition Beyond Meat grill kits for the 4th of July holiday.
Shares also soared nearly 20% on Jan. 26 after news of a partnership with PepsiCo (PEP) to produce healthy, protein-filled snacks. The Pepsi deal was Beyond Meat’s most far-reaching partnership to date, giving the company access to new distribution channels.
Fast-food giant McDonald’s (MCD) also announced it would begin offering McPlant menu items made with Beyond products last November. The expansion of McDonald’s vegetarian menu options came after a test run in Canada with Beyond Meat products.
Beyond Meat Expands To China
Additionally, Beyond Meat said in September 2020 it’s building production facilities near Shanghai, China. This makes Beyond the first foreign vegan meat company to set up operations in the country.
Beyond Meat announced the grand opening of its first production plant in China on April 7.
The Shanghai facility is key to growing Beyond Meat’s presence in the Chinese market. BYND stock views the region as a significant part of the company’s long-term growth strategy.
The opening of the China-based production facility comes after the launch of a new e-commerce site for Beyond Meat. The platform allows consumers to purchase vegan meat products directly from the company.
“In Asia, our goal of establishing a production footprint before the end of 2020 remains on track,” Brown said. “We believe the magnitude of the opportunity in Asia merits significant investments, and we will continue to proceed with a sense of urgency appropriate for the challenge and opportunity alike.”
BYND Stock Fundamental Analysis
To determine whether BYND stock is a buy now, fundamental and technical analysis is key.
The IBD Stock Checkup tool shows that BYND stock has an IBD Composite Rating of 6 out of a best-possible 99. The rating measures a stock based on the most important fundamental and technical stock-picking criteria. IBD research shows some of the greatest stock winners of all time often have a Composite Rating of at least 95 near the start of big runs.
The Composite Rating looks at earnings and sales growth, profit margins, return on equity and relative stock price performance, among other metrics.
BYND stock has an EPS Rating of 1 out of 99. The EPS rating compares a stock’s quarterly and annual earnings-per-share growth with that of all other stocks.
The producer of plant-based meat ranks No. 9 among its food retail peers in terms of Composite Rating. But the Food-Meat Products group currently is ranked a weak No. 151 out of the 197 industry groups IBD tracks. Investors should focus on stocks in the top quartile of IBD’s groups.
BYND Stock Technical Analysis
BYND stock has been in a decline since hitting a short-term high of 160.28 in late June. Now the stock is well below its 10-week moving average. Shares plummeted further to hit a 19-month low after Q3 earnings on Nov. 10.
BYND stock saw a boost in early 2021 on partnership news, powering above the 150 price level on Jan. 25 to clear a short, handle-like consolidation. But shortly after, the 200 price level became a resistance area for the stock.
Shares also tried to advance amid a Reddit-fueled meme stock rally in late May. But those gains proved to be very short-lived.
BYND stock is now 69% below 52-week highs. Beyond needs time to trend higher and form a new base before investors consider adding it to their portfolios.
Beyond Meat Stock: Is It A Buy Right Now?
The long-term outlook for plant-based meat seems compelling, and Beyond Meat is seeing a rebound in the food-service market. But the chart’s technical picture remains poor.
Bottom line: BYND stock is not a buy right now. Beyond Meat is failing to generate sustained traction from fundamental catalysts and still needs to prove itself. Investors should watch to see if BYND stock can establish a sustained uptrend above its 50-day and 200-day lines and then build a base with a proper entry point.
To find the best stocks to buy and watch, check out IBD’s Stock Lists page. More stock ideas can be found on our Leaderboard and MarketSmith platforms.
Follow Alexis Garcia on Twitter at @IBD_Alexis.
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