Beyond Meat Stock Is Tumbling. Its Earnings Were That Bad.

Beyond Meat (ticker: BYND) reported a GAAP loss of $1.58 a share, missing forecasts for a loss of 97 cents, on sales of $109.5 million, below estimates for $112.4 million. The company did maintain its 2022 revenue target of a range between $560 million and $620 million, but that didn’t seem to be enough for investors, as the stock fell sharply even as its CEO focused on Beyond Meat’s long-term goals.

“In the first quarter, we made good progress against our goal of building tomorrow’s global protein company,” Beyond Meat CEO Ethan Brown said in a press release. “Whether furthering strategic partnerships in the restaurant industry, the market success of our first product collaboration with

PepsiCo
,
or the continued acclaim awarded to our products here in the U.S. and EU, we continue to lay a robust foundation for our long-term growth.”  

Perhaps, but investors seem to be more worried about the short term. Beyond Meat’s costs surged 97% year over year during the first quarter, which caused gross margin to slip to 0.2%, from 30.2%. The company also spent $165.2 million of net cash on operating activities during the quarter, leaving it with a cash balance of $547.9 million.

“While we appreciate management’s long-term view, investors are going to be increasingly questioning BYND’s path to profitability, which isn’t good for the shares in a rising interest rate environment,” writes CFRA analyst Arun Sundaram, who also says that Beyond Meat’s spending raises “the likelihood of a capital raise by the end of this year.”

And that’s rarely appetizing for an investor.

Write to Ben Levisohn at ben.levisohn@barrons.com