Shares of Beyond Meat (NYSE: BYND) crashed this week after the company reported worse-than-anticipated sales on Monday.
Fundamental analysis: “Shockingly weak” numbers
Beyond Meat posted a sharp loss for the quarter due to a decline in demand for the company’s plant-based meat at restaurants and stores. The company reported a loss of $0.28 a share excluding items, compared to consensus estimates of a $0.05 profit. Credit Suisse analyst Robert Moskow described the latest results as “shockingly weak”.
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Net sales climbed by 2.7% to $94.4 million (£71.83 million), far away from consensus estimates of $132.81 million. Beyond Meat stock was also pressured by news that McDonald’s latest decision to roll out a new product called “McPlant”, which is also a line of plant-based meat.
McDonald’s decision to launch its own plant-based burger comes after the end of its partnership with Beyond Meat, which many think is the main reason behind McDonald’s move. However, Ethan Brown, CEO of Beyond Meat thinks that was “greatly exaggerated”.
“Our relationship with McDonald’s is good. It’s really strong. Our work there on behalf of what they’re doing continues,” he said.
The company added it was involved in creating the plant-based patty for McPlant, after working together to create the McDonald’s new P.L.T burger.
Beyond Meat would sell its burgers across 7,000 stores of healthcare company CVS health Corp in the U.S., Brown said, and sell its Beyond Meatballs at 5,000 CVS stores.
Following an almost 200% spike in retail sales in the previous quarter, Beyond Meat sales growth declined to 40.5$ in Q3, as a result of slower demand compared to a few months ago after the coronavirus outbreak.
Technical analysis: Shares crash
Shares in the California-based company plummeted by 29% in pre-market trading as sales increased at the worst rate since its IPO in May last year. BYND share price ultimately closed nearly 17% lower to print a 6-month low at $113.26.
BYND stock daily chart (TradingView)
The sellers have been successful in forcing the price action to stay below the 100-DMA at $125.87. The zone around $120 remains strong support and an opportunity to buy BYND shares, while any rebound is likely to be capped by resistance at $141.00.
Plant-based meat producer Beyond Meat reported lower-than-expected sales and a significant loss in the third quarter as a result of a much weaker demand compared to the previous quarter.