What to Expect for This Plant-Based Giant's Quarterly Report

Beyond Meat is slated to report quarterly earnings on Oct. 26

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Beyond Meat, Inc. (NASDAQ:BYND) is one of the most well-known companies in the plant-based “meat” product industry. The company was founded in 2009 and started trading publicly in 2019. With its upcoming earnings announcement currently slated for October 26, the company will be looking to keep its upward momentum going. BYND stock is up 67% year-over-year, and has surged nearly 270% since hitting an annual of $48.18 in March 2019.

Beyond Meat has beat expectations on two of its four most recent quarterly earnings reports.  Ahead of the next upcoming earnings release on Oct. 26, Beyond Meat is expected to report an EPS of $0.05. In the first quarter of 2020, Beyond Meat was expected to have a sizeable drop in EPS as compared to its previous quarter. Instead, the company reported $0.03 EPS and beat expectations by $0.10. In the fourth quarter of 2019, Beyond Meat missed earnings expectations by $0.02.

On an annual basis, Beyond Meat has grown its revenue exponentially since 2016. In 2017, the company doubled its revenue. The company posted its best year in 2019. Beyond Meat grew by about $210 million in revenue in 2019 compared to the $88 million produced in the prior year, and also reduced its net losses to $12.4 million. In 2017 and 2018, Beyond Meat posted net losses of about $30 million each year.

Beyond Meat has always maintained consistent growth in revenue on an annual and quarterly basis. However, its net income has been pretty inconsistent on a quarterly basis. Beyond Meat currently has $222.33 million in cash and $64.23 million in total debt. The company’s balance sheet holds $517.97 million in total assets and $128.06 million in total liabilities. Beyond Meat's equity currently stands at $389.91 million.

Beyond Meat is financially sound in general. The company is still fairly new, but continues to grow its revenue and make strides towards profitability. It also has a great balance sheet that would allow it to pay its total current debt and still have about $158 million left over. However, the biggest issue with the company for prospective investors is its current valuation.

BYND stock is already priced-in for the future years of growth it is anticipating. The lure of a vast total addressable market (TAM) is what keeps pushing the stock higher, but there are still far more questions than answers about the company from an investor standpoint. For example, the TAM for Beyond Meat is all based on anticipation, and has not been truly quantified. There may be a good percentage of the population who remain reluctant to buy into plant-based products regardless of future circumstances. It is also still unknown what percentage share of the market Beyond Meat will claim over time. Although the company seems to be in a good position to take the top spot in the new industry, there is always the possibility of new competitors taking a lead in the sector in the long run.

Overall, the amount of revenue Beyond Meat is currently producing is way too low for the market cap it carries. BYND stock could be a decent speculative play at anything under $100 per share, but its current price isn’t justifiable for investors looking for a reasonable return in the coming years.

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