Should you buy Beyond Meat?

After the announcement of Beyond Meat Inc (BYND) earnings report and strategic partnerships with McDonald’s and Yum! the stock has closed at a loss on Thursday. What does the future look like for the plant based burger company?

Beyond Meat Inc (NASDAQ: BYND) saw its share price close 5.5% lower after it reported high Q4 2020 losses. The company saw a Q4 net loss of US$25.1 million, compared to US$0.5 million in the prior year period.

In the fourth quarter of 2020, net loss included US$3.7 million specifically related to COVID-19, including inventory write-offs. Excluding these items, the adjusted net loss was US$21.4 million in the fourth quarter of 2020.

Beyond Meat and McDonald’s have signed a three-year global strategic agreement. This means Beyond Meat will supply the McPlant burger, a new plant-based burger being tested in some McDonald’s markets globally. They will also collaborate on co-developing other plant-based options for McDonald’s.

Beyond Meat have also partnered with Yum! The company will supply large restaurant chains such as KFC, Pizza Hut and Taco Bell over the next several years.

Beyond Meat’s shares were up as much as 53% earlier this year, after the stock hit a year-to-date peak price of US$192 on 27 January. The rally came after PepsiCo and Beyond Meat announced plans to form The PLANeT Partnership, LLC (TPP), a joint venture to develop plant-based products.

Beyond Meat shares are still up some 14.5% year-to-date. In the last year, the alternative food manufacturer’s share price has skyrocketed over 77%, as the Covid-19 pandemic boosted the company’s retail sales in the first and second quarters of 2020.

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Chart from CNN Money.

Buy or sell?

The stock has received a consensus rating of ‘hold’ and an average price target of US$115.68 from 20 analysts, according to the latest MarketBeat data.

Chart from CNN Money.

Price Forecast

Analysts see a 19.5% downside on the stock in the next 12 months. 

Beyond Meat posted an adjusted net loss of US$0.34 per common share, which is bigger than analysts’ projections of US$0.14.

Beyond Meat have not proven much resilience over the pandemic resulting in a massive loss of earnings which has no doubt affected the stocks price forecast. With vegetarianism on the rise and with a new deal with food giants, will beyond meat make a strong come back over the longer term? If you are ready to invest, we recommend eToro and easyMarkets for beginners. 

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