Producer of vegetable meat products Beyond Meat (NASDAQ: BYND) the stock has taken a beating since it peaked at its pandemic highs of $221 and tanked harder than the indices to sell† Rising labor cost and inflation have cut in the thin margins as the COVID spikes continue to hurt its business. the global supply chain disruption and rising logistics costs are also strong headwinds that have hit both the top and bottom lines. The company’s negative revenue growth in the fourth quarter of 2021 shocked investors as a grow the stock needs positive growth to maintain its valuation. However, the company believes growth will return in 2022 after the temporary slump in the quarter. if COVID-related disruptions consumers are expected to return to healthy foods from spending on comfort foods. Beyond Meat’s food service business is expected to recover more quickly as restaurants resume full operations. The company is convinced that its investments in the EU and China will pay off in fiscal 2022. Cautious investors seeking exposure to the plant-based food trend may look for opportunistic pullbacks in Beyond Meat stocks.
Q4 Fiscal 2021 Revenue Release
On February 24, 2021, Beyond Meat announced its fourth quarter 2021 results for the quarter ended December 2021. The company reported a loss of earnings per share (-$1.27) excluding one-time items versus consensus analyst estimates for a loss of (-$0.68), a (-$1.27) miss. Revenues were down 1.2% year-over-year (YoY) to $100.07 million, which was below analyst estimates of $101.92 million. Gross profit margins amounted to 14.1% of net income. Ethan Brown, CEO of Beyond Meat, commented: “In 2021 we saw strong net revenue growth from our international channels, as well as sporadic but promising signs of a resumption of net revenue growth from US foodservice channels, as the COVID-19 variants peaked and fell. however, gains were dampened by what we believe to be a temporary disruption to US retail growth, for our brand and the broader category… “At the start of 2022, we are pleased with the progress we are making on our long-term strategy, such as increasing the number of testing and deployment of the core menu recently announced by our global QSR partners.While we will continue to invest in 2022, we expect to substantially moderate the growth of our operating expenses by leveraging the building blocks we now have to support our serving customers, consumers and markets at the same time.”
The company has issued in-line guidance for full fiscal year 2022 revenue between $560 million and $620 million versus $611.37 consensus analyst estimates. The effects of COVID-19 continue to plague the recovery, alongside rising labor costs and inflation.
Takeaway for conference calls
CEO Brown discussed the challenges impacting his business. He noted that since it went public in 2018, the company has grown 328% at a three-year CAGR of 74%. While revenues were up 37% in 2020, there was a dip (-1.4%) in the fourth quarter of 2021. He said he believes the reduced growth in 2021 was aberration and temporary. He noted that his belief stems from four general factors. They do not expect specific consumer trends that were popular during COVID to continue. For example, consumers’ focus on health-oriented eating choices diminished, rather than settling for comfort foods with a reduced preference to try new foods. The company was poised to launch its largest in-store sampling program, only to sink them due to the rise of the Delta variant. The company expects to resume the program in 1H 2022. Second, the company has a large portfolio of new products entering and/or expanding (eg Beyond the Orange Chicken at Panda Express). Third, alleviating the pandemic means its foodservice operations should see improvement as the COVID disruptions disappear. Finally, the company has invested in the EU and China markets, which should provide significant opportunities for the retail and food service sectors in those regions.
BYND Opportunistic Withdrawal Levels
Using the gun cards on weekly and daily charts can provide a short-term perspective of the playing field for BYND stocks. The weekly gun chart peaked on its last flush attempt near the $53.61 Fibonacci (fib) level† The weekly inverse pup breakdown has a declining 5-period moving average (MA) resistance at $39.97, followed by the weekly 15-period MA at $46.79. Weekly stochastics fell back below the 20 band and the weekly lower Bollinger Bands (BBs) sit at $24.00. the weekly market structure layer (MSL) buy triggers above the $41.95 level. The daily gun chart is making a breakthrough attempt as the 5-period MA moves up to $39.02 and tries to cross the 15-period MA at $39.30. The 50-period daily MA resistance is at $43.95. The daily upper BBs are $47.40. The daily stochastic stagnates at the 30 band, ready to either form a mini pup higher causing a breakout, or go back down to cause a reverse pup breakdown on the daily chart. Cautious investors can watch for opportunistic pullback levels on the $35.41 fib, $33.06 fib, $29.50, $27.17 fib, $25.44, $22.54 fib, $20.54 and the $17.00 fib level. Upward trajectories range from the $53.61 fib level to the $67.68 fib level.