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On Thursday, TD Cowen analysts adjusted their outlook on Beyond Meat Inc (NASDAQ:BYND), slashing the price target to $2.50 from $5.00, while maintaining a Sell rating on the company’s shares. According to InvestingPro data, Beyond Meat’s financial health score is rated as WEAK, with particularly concerning metrics in profitability and price momentum. The revision follows Beyond Meat’s recent earnings report, which revealed mixed results, including a stabilization in sales but a shortfall in gross profit and EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization).
The company reported a slight beat in fourth-quarter sales, adding $10 million more than anticipated. However, EBITDA for the same period was $26 million below expectations. InvestingPro analysis reveals concerning fundamentals, with a current gross profit margin of just 5.92% and an EBITDA of -$134.86 million in the last twelve months. Beyond Meat also provided guidance for the year 2025, projecting sales growth ranging from a 2% decline to a 2.5% increase, alongside a target gross margin of 20%. These figures fell short of the consensus estimates, prompting concern among analysts.
In response to the financial challenges, Beyond Meat’s management announced another round of workforce reductions and set a goal to achieve positive EBITDA by the end of 2026. Despite these measures, analysts noted that the company’s strategy for restructuring its capital structure remains uncertain.
The lowered price target of $2.50 is based on a 4.5x Enterprise Value/Sales (EV/Sales) multiple applied to TD Cowen’s fiscal year 2026 sales estimate for Beyond Meat. This calculation also incorporates the assumption that the company will issue an additional 5 million shares through their At-The-Market (ATM) offering, which represents a 7% increase in shares outstanding. Over the past two years, Beyond Meat’s stock has fluctuated within a range of 3x to 9x sales, reflecting the volatility and investor sentiment surrounding the plant-based meat producer’s financial performance. InvestingPro subscribers have access to 15+ additional key insights about Beyond Meat, including detailed analysis of its debt structure, cash flow metrics, and comprehensive valuation models in the Pro Research Report.
In other recent news, Beyond Meat Inc. reported its fourth-quarter 2024 earnings, revealing a revenue of $76.7 million, which slightly exceeded the forecast of $75.98 million. However, the company’s earnings per share (EPS) was -$0.65, missing the analyst forecast of -$0.44. Beyond Meat’s gross margin improved to 13.1% from a negative margin in the same quarter of the previous year. Despite the revenue beat, concerns remain due to the larger-than-expected EPS loss. Mizuho (NYSE:MFG) Securities maintained its Underperform rating on Beyond Meat, citing challenges in the company’s future guidance and setting a price target of $3.00. BMO Capital Markets also adjusted its outlook, lowering the price target from $6.00 to $5.00, while maintaining a Market Perform rating, reflecting concerns over sales trajectory and ongoing market challenges. The company announced strategic measures, including workforce reductions and a suspension of operations in China, as part of its efforts to achieve positive EBITDA by the end of 2026.
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