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 its all-time highs in less than three months. Its trading history has been rocky since.
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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? It's key to analyze the vegan meat company's fundamental and technical picture first.
Inflation Hits Beyond Earnings
Beyond Meat's losses continued to mount in a Q3 earnings miss on Nov. 9. The company reported a wider-than-expected loss of $1.60 per share on revenue of $82.5 million. Wall Street had expected a loss of $1.14 per share on revenue of $98.1 million, according to Refinitiv data.
Softening demand has dampened the once sizzling BYND stock. The vegan meat maker saw net sales decline 22.5% in the last quarter. Discounts for retail and restaurant consumers have not helped either. Grocery sales fell roughly 12%, while food services grew a meager 6% last quarter.
Beyond Meat also revised its 2022 revenue guidance in October to a range of $470 million-$520 million. Those figures are down from previous estimates of $470 million to $520 million just last quarter. The company also said that it plans to cut its workforce by 19% as it struggles to find its way in an uncertain economic environment.
BYND Stock Jumped On KFC Launch
Beyond Meat started the year with a boost from its nationwide debut in KFC restaurants. The vegan meat maker announced on Jan. 5 that the highly anticipated plant-based chicken nuggets would be coming to menus midmonth. BYND stock initially jumped more than 14%, ending the month with a 3.8% gain.
The chicken nugget rollout is the culmination of a multiyear partnership with Yum Brands' (YUM) KFC. The fried chicken chain was the first national U.S. fast food restaurant to introduce plant-based chicken to consumers with a limited test run in August 2019. Beyond Meat and KFC expanded that partnership to several more cities in 2020.
And KFC isn't the only partnership in Beyond Meat's portfolio. Last year, the plant-based meat maker inked deals with fast-food giant McDonald's (MCD) and 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.
Those partnerships gave BYND stock short term pops in the market, but failed to generate any long-term gains for investors.
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BYND Stock Fundamental Analysis
To determine whether BYND stock is a buy now, fundamental and technical analysis is key.
On the fundamentals side, the IBD Stock Checkup tool shows that BYND stock has a dismal IBD Composite Rating of 1 out of a best-possible 99. The Composite Rating looks at earnings and sales growth, profit margins, return on equity and relative stock price performance, among other metrics. 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.
However, IPO stocks often score low Composite Ratings simply because they have not had time to establish a solid track record of fundamentals.
BYND stock has a worst-possible 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. 7 among its food products industry peers in terms of Composite Rating. The Food-Meat Products group currently is ranked No. 120 out of the 197 industry groups IBD tracks. Investors should focus on stocks in the top 40 or 50 in IBD's groups.
BYND Stock Technical Analysis
Looking at the technical side of the picture, BYND stock has been in a decline since hitting a short-term high of 160.28 in late June. Shares plummeted further to hit an all-time low after Q3 earnings on Nov. 9.
BYND stock received a lift 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, shares fell below the 200 price level, which then 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 also proved to be very short-lived.
BYND stock is now 88% below its 52-week high. In order to generate valid buy points, Beyond Meat needs to trend higher and possibly form a valid base or break above downward-sloping trendlines.
Beyond Meat Stock: Is It A Buy Right Now?
The long-term outlook for plant-based meat appears compelling. But BYND stock's technical picture remains — to say the least — weak.
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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