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Investing.com - Beyond Meat Inc. (NASDAQ:BYND) received a reiterated Underperform rating and $1.50 price target from Mizuho ahead of its full third-quarter earnings report scheduled for November 4. According to InvestingPro data, the company’s financial health score is rated as WEAK, with multiple indicators suggesting operational challenges. The stock has declined nearly 83% year-to-date, significantly underperforming the broader market.
The plant-based meat alternative company disclosed preliminary third-quarter net sales showing a 14% year-over-year decline, which aligns with Street expectations and falls within the midpoint of the company’s guidance range. However, EBIT is expected to be lighter than Street estimates, with softer gross margins anticipated. InvestingPro analysis reveals concerning fundamentals, with gross profit margins at just 11.34% and revenue declining by 5.17% over the last twelve months. For deeper insights into Beyond Meat’s financial health, InvestingPro subscribers have access to over 15 additional key metrics and analysis tools.
Mizuho noted that Beyond Meat’s fundamentals will likely remain under pressure as traditional animal meat consumption trends upward, with demand proving resilient despite record prices. While cost savings are expected to support EBITDA, the firm believes continued free cash flow burn is likely without a sales inflection. This concern is validated by InvestingPro data showing significant debt burden of $1.26 billion, though the company maintains a healthy current ratio of 3.29.
The company also disclosed an unquantified but "material" forthcoming impairment charge, which Mizuho interprets as reflecting more subdued internal expectations for future performance. This development has prompted Mizuho to reduce its long-term 10-year U.S. plant-based meat category sales estimate to $2.4 billion from a previous $4 billion projection.
For investors seeking exposure to plant-based food and beverage sectors, Mizuho recommends SunOpta Inc. (NASDAQ:STKL) with an Outperform rating and $10 price target instead of Beyond Meat.
In other recent news, Beyond Meat, Inc. released its preliminary financial results for the third quarter of 2025, estimating net revenue of approximately $70 million. This figure aligns with the company’s previous guidance range. The anticipated gross margin is between 10% and 11%, factoring in expenses related to operations in China. Mizuho has lowered its price target for Beyond Meat to $1.50 from $2.00, maintaining an Underperform rating due to significant equity dilution following a recent debt restructuring. The company settled its convertible notes early, reducing its debt from $1.15 billion to about $250 million, addressing short-term liquidity issues.
Beyond Meat also launched new clean label products, Beyond Burger and Beyond Beef, at Erewhon stores, featuring 21g of protein per serving and no GMOs or added hormones. Additionally, the company announced plans to expand its product availability at over 2,000 Walmart stores across the U.S., including the new Beyond Burger 6-Pack. Beyond Meat’s stock has experienced significant upward pressure, with a 70% surge amid interest in small-cap stocks with high short interest.
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