Beyond Meat Inc. (NASDAQ: BYND) stock has fallen over 65% since its peak of $239.71 on July 26. The plant-based meat maker has been facing increasing competition from other players including Impossible Foods, Kroger (NYSE: KR), Tyson Foods (NYSE: TSN), and Kellogg (NYSE: K). The players could take a bigger bite from Beyond Meat revenue.
In addition, the venture of McDonald’s Corp. (NYSE: MCD) in the plant-based foods industry could impact Beyond Meat. McDonald’s is testing the plant, lettuce, and tomato (P.L.T) in Canada due to the growing interest of both diners and large food companies.
The net sales and gross margin of Beyond Meat are anticipated to benefit from increased sales of fresh products due to the higher net selling price per pound of fresh platform products compared to frozen platform products. The company could stand beneficial by the greater demand for certain of its products during the summer grilling season.
However, the company has been facing production shortfall relative to customer demand. The sales discounts and promotional activities are impacting the net revenues. The company has been struggling to expand its production, which is progressing at a gradual pace.
The market experts continue to expect the company’s rate of sales growth to slow down due to stiff competition in the meat alternatives market. This also includes the preference of veggie and garden food products instead of industrial products by the chefs and consumers.
Beyond Meat has been striving to achieve the $100 million mark in the top line. However, hindrances from rival could shred a slice out of the sales. The company still depends on the Retail and Restaurant & Foodservice channels for the majority of top-line growth.
Meanwhile, the company remains more financially stable as it has little debt compared to the total cash. As of September 28, 2019, the company had $312.5 million in cash and cash equivalents while the total debt stood at $30.94 million. The primary cash needs of Beyond Meat are for operating expenses, working capital, and capital expenditures to support the growth in the business.
The market experts believe that Beyond Meat could survive from the mounting competition and could outrun the rivals in the long run. This can be made by establishing its presence in the markets and introducing new products. The analysts have recommended a “hold” rating on the stock, which could rebound from the losses in the future.