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On Wednesday, Piper Sandler maintained its underweight rating on shares of Beyond Meat Inc . (NASDAQ:BYND), with a steady price target of $3.00. The firm's stance comes in the wake of findings from its comprehensive Teen Survey, which polled approximately 13,500 participants on their attitudes towards plant-based meat.
The survey revealed that interest among teens has plateaued, with 33% indicating they currently consume or are open to consuming plant-based meat products. This figure shows a marginal increase from 32% in Spring 2024, yet represents a decline from 35% in Fall 2023. The data also indicates a drop from higher levels of interest recorded in previous years, with 42% in Spring 2023 and 49% in Spring 2021.
Furthermore, the percentage of teens who already eat plant-based meat but intend to reduce their consumption has risen to 28%, up from 26% in the previous survey. The survey also highlighted brand preferences among teens who do consume plant-based meat: 39% expressed no particular brand loyalty, 30% named Impossible as their preferred brand, 16% favored Beyond Meat, and 11% chose Morningstar Farms (Kellanova).
The report underscored the importance of the young consumer demographic for the future growth of the plant-based meat category. However, the survey's insights suggest that Beyond Meat may encounter significant long-term challenges, in addition to the near-term headwinds it is currently facing. The analyst noted that Beyond Meat's stock is trading at a premium compared to Oatly (NASDAQ:OTLY), despite having poorer operating metrics.
In other recent news, Beyond Meat reported mixed results for the second quarter of 2024. The company's net revenues saw a year-over-year decrease of 8.8% to $93.2 million, despite an increase in net revenue per pound and a significant reduction in operating expenses and cash consumption.
Gross margin improved to 14.7%, the highest since the third quarter of 2021, and operating expenses were reduced to $47.6 million. However, Beyond Meat reported a net loss of $34.5 million for the quarter. The company's updated 2024 outlook anticipates net revenues between $320 million to $340 million, with gross margin expected in the mid-teens range.
BTIG maintained its Neutral stance on Beyond Meat, recognizing improvements in product quality but noting struggles to increase consumer adoption. The analyst also expressed concerns over the company's market performance and the possibility of a capital raise.
Meanwhile, Mizuho reiterated its Underperform rating, citing potential risks that could impact Beyond Meat's performance and suggesting that any potential revenue gains are more likely to stem from distribution expansion rather than an increase in product sales velocity.
InvestingPro Insights
The recent Piper Sandler survey findings align with several InvestingPro metrics and tips for Beyond Meat (NASDAQ:BYND). The company's market cap stands at $424.7 million, reflecting the challenges highlighted in the teen survey. InvestingPro data shows a revenue decline of 10.94% over the last twelve months, supporting the notion of plateauing interest in plant-based meat among younger consumers.
Two key InvestingPro Tips are particularly relevant:
1. Beyond Meat is quickly burning through cash, which could be exacerbated by the declining teen interest and potential reduction in consumption.
2. Analysts do not anticipate the company will be profitable this year, aligning with the survey's implications for future growth challenges.
These insights, along with 9 additional tips available on InvestingPro, provide a comprehensive view of Beyond Meat's financial health and market position. The data underscores the importance of monitoring consumer trends, especially among younger demographics, for companies in the plant-based meat sector.
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