Options Bulls, Analysts Pile on Beyond Meat Stock After Earnings

BYND is up nearly 47% year-to-date now

Deputy Editor
May 6, 2020 at 9:58 AM
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The shares of Beyond Meat Inc (NASDAQ:BYND) are up 12.5% to trade at $112.42 this morning, after the plant-based meat substitute manufacturer reported first-quarter earnings of 3 cents per share on revenue of $97.07 billion, both of which beat out Wall Street's estimates. While the company suspended its 2020 guidance, expansion in retail outlets and supermarkets helped offset struggling restaurant sales amid the coronavirus outbreak. 

This is the company's first positive post-earnings reaction since June of last year. Today's pop moves Beyond Meat stock up 47% year-to-date. And should today's gains hold, the shares will have conquered their 200-day moving average for the first time ever on a closing basis.

Six analysts have already chimed in with price-target hikes, the highest coming from from Piper Sandler, which lifted its estimate to $95 from $72. However, the brokerage firm also warned to expect near-term headwinds in its restaurant channels amid the COVID-19 fallout. The bull notes today runs counter to the overall analyst sentiment. Of the 14 in coverage, 11 rate it a tepid “hold” or worse. Echoing this is the consensus 12-month price target of $84.95, which sits at a 15.2% discount to current levels.

Short sellers keep piling on, with short interest up 7.5% in the last reporting period. Now, the 9.16 million shares sold short makes up a whopping 29.9% of the stock's available float, which could be fuel more gains for the stock should some of this pessimism begin to unwind. 

In the options pits, BYND sports 10-day call/put volume ratio of 2.22 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), a ratio that sits in the elevated 87th percentile of all other readings from the past 12 months. This suggests the appetite for short calls have been relatively health in the last 10 weeks. 

Today, calls continue their reign. Already, 60,000 calls have changed hands, eight times the average intraday amount and double the number of puts traded. Leading the charge is the weekly 5/8 120-strike call, where new positions are being opened. Buyers of this call are banking on more gains for BYND by the end of the week, when the options expire.

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