What Happened:
Shares of plant-based protein company Beyond Meat (NASDAQGS:BYND) fell 14.7% in the morning session after the company reported first-quarter earnings results, with revenue down (18% y/y) and adjusted EBITDA falling below expectations. The company attributed the weak sales to a 16.1% decrease in the volume of products sold and a 2.3% decrease in net revenue per pound (driven by increased trade discounts and pricing changes). Beyond Meat still seems to believe that its previously-provided full-year guidance can be achieved as the company reiterated that full-year guidance for revenue and implied operating profit. Overall, this was a mediocre quarter for Beyond Meat.
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What is the market telling us:
Beyond Meat's shares are very volatile and over the last year have had 57 moves greater than 5%. But moves this big are very rare even for Beyond Meat and that is indicating to us that this news had a significant impact on the market's perception of the business.
The biggest move we wrote about over the last year was 2 months ago, when the stock gained 89.4% on the news that the company reported fourth-quarter results, which blew past analysts' revenue expectations. On the other hand, its full-year revenue guidance missed analysts' expectations and its operating margin missed Wall Street's estimates. What seems to be the saving grace and reason for the stock action, though, is the company's 2024 gross margin and implied operating profit guidance. Beyond Meat is calling for gross margin in the "mid to high teens range for the full year 2024", which is much better than Wall Street's projection of roughly 7%. Additionally, the company's guidance calls for a smaller operating loss than Wall Street expected. Overall, the results were fine and the guidance is highly comforting.
Beyond Meat is down 14.4% since the beginning of the year, and at $7.02 per share it is trading 60.3% below its 52-week high of $17.67 from July 2023. Investors who bought $1,000 worth of Beyond Meat's shares 5 years ago would now be looking at an investment worth $102.70.
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