Shares of Beyond Meat (NASDAQ: BYND) continued to get clobbered on Friday, and were down over 17% in afternoon trade, after the company reported mixed results for its fourth quarter a day ago. Despite reporting a massive jump in revenue, the company delivered a loss as opposed to the expected earnings, disappointing investors.
This has led to various speculations over what lies ahead for the company and the stock. Beyond Meat saw solid revenue growth of 212% in the fourth quarter helped by higher sales volume in the Fresh platform. The quarterly topline number of $98.5 million was higher than the total annual revenue of $88 million achieved in 2018.
Beyond Meat continues to increase its partnerships with retailers
and restaurant chains to drive growth, and its products are now available in
77,000 retail restaurant and food service outlets. The company has partnered
with Dunkin’ Brands, Carl’s Jr., and Hardee’s, among others to include its
products on their menus.
The company is also working on developing new products and believes there are vast opportunities for further innovation and expansion. However, Beyond Meat continues to incur high costs related to its investments in innovation, marketing and restructuring, which have been taking a toll on its profitability.
Also read: Beyond Meat Q4 2019 Earnings Report
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In addition, the company has been facing issues related to
capacity expansions and production shortfalls which have hurt its ability to
meet the increasing demand for its products. Beyond Meat also faces tough
competition with more and more players entering the faux meat industry.
There is also rising speculation that the shift towards meat
alternatives is just a fad that is likely to pass going forward. This, coupled
with health concerns over the highly processed nature of plant-based products, might
affect the industry in future.
Despite the massive growth being witnessed by Beyond Meat at present, there are several factors that pose risks for the company. In such a scenario, the stock remains highly volatile and subject to uncertainty.