Analysts at T. D. Cowen have downgraded Beyond Meat to underperform based on declining sales, continuing losses and the need to acquire additional capital to survive.
CHICK-NEWS reviewed the Q2 results for BYND that can be retrieved by entering Beyond Meat in the SEARCH block. U. S. retail revenue was down 38.5 percent year-over-year and international was down 15.6 percent. The U. S. Food Service Revenue was lower by 45.4 percent. This is consistent with the fact that most QSRs that have trialed Beyond patties have terminated purchase based on consumer rejection related to price and quality relative to real meat.
Cowen notes that Beyond will have “difficulty in attaining a path to sustainability”. Given an 18 percent projected sales decline for Fiscal 2023, sales will only attain $330 million and operating expenses will be in the region of $220 million. In Q2, Beyond Meat posted a loss of $53 million and the company accumulated $1.1 billion in debt.
Despite optimistic pronouncements from management the financial state of Beyond Meat is precarious. At the end of the second quarter of FY 2023 critical values were:-
- An accumulated deficit of $856,651 million.
- Trailing 12-month negative operating cash flow of $197 million
- Effective July 14th 36.2 percent of float was short
- Share price off 64.3 percent over past 12 months
- Institutional holdings declined from 63 percent to 37 percent over past two quarters