Research and development costs rose from 7% of revenue in 2019 to 12% over the TTM.selling, general, and administrative costs rose from 25% of revenue in 2019 to 39% of revenue over TTM.The cost of developing new products, marketing those products to consumers, and fending off these competitors is getting more and more expensive for Beyond Meat: These competitors can leverage superior production scale, distribution scale, and more retail shelf space to sell their alternative meat products more and more effectively.įigure 3: Full Plate of Competition For Beyond MeatīYND Competition Chart New Constructs, LLC Why Beyond Meat Remains Beyond Overvalued: Competition Can Eat Its Lunch: The main obstacle to Beyond Meat justifying the expectations baked into its stock price continues to be the ample competition all striving to replace what is already a commoditized product (traditional meat).Ĭompetition, from both incumbent meat processors and distribution partners, continues to undermine Beyond Meat’s growth and profitability. U.S Retail revenue fell 4% YoY through the first three fiscal quarters of 2021 and the company guided for fiscal 4Q revenue (at the midpoint) 24% below consensus expectations. Growth slowed significantly in 2021, with total revenue through the first three fiscal quarters growing just 19% YOY, compared to 53% YoY growth in the same pierid in 2020. In early years, the company produced impressive top-line growth rates that enticed growth investors looking for the next high-flyer. Main Reason for Short Outperformance: Slowing Growth and No Profits: Beyond Meat was supposed to not only take over the alternative meat market but transform the meat market as a whole. Even after the stock price decline, Beyond Meat remains overvalued and investors hoping for a turnaround are taking on unnecessary risk. I originally added Beyond Meat to the Focus List Stocks: Short Model Portfolio in September 2020 and it outperformed as a short by 75% in 2021. Winner: Focus List Stocks: Short: Beyond Meat (BYND): Down 48% vs. Performance includes the performance of stocks currently in the Focus List Stocks: Short Model Portfolio, as well as those removed during the year, which is why the number of stocks in Figure 2 (31) is higher than the number of stocks currently in the Model Portfolio (28). Focus List Short Performance By Stocks New Constructs, LLC
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