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Beyond Meat’s stock has plummeted over the past five years, losing heavily to the S&P 500 index.
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Weak demand for the category and a lack of pricing power have caused sales to decline.
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While patience often pays off for investors, the time for patience is likely over.
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10 stocks we like better than Beyond Meat ›
Briefly a Wall Street darling after its IPO, Beyond the meat (NASDAQ: BYND) He has been fighting for years. The stock has significantly underperformed S&P 500 (SNPINDEX: ^GSPC)causing huge losses to investors who stood firm. Here’s how Beyond Meat has performed over the past five years and what investors should do next.
Beyond Meat stock initially rose after its initial public offering in 2019, but the last five years have been an unmitigated disaster for the stock. Beyond Meat has lost more than 99% of its value over the past five years, compared to an 84% gain for the S&P 500 index over the same period. The S&P 500 outperformed Beyond Meat by a whopping 183 percentage points.
Zooming in on more recent time periods doesn’t change the picture. Over the past three years, Beyond Meat shares have plummeted 93%, while the S&P 500 posted a 65% gain, resulting in 158 percentage points of outperformance for the index. Last year, Beyond Meat shares fell 83% and the S&P 500 rose about 11%. That translates to 94 percentage points of outperformance.
What went wrong with Beyond Meat? For starters, demand for plant-based meat alternatives in the United States declined in the post-pandemic period. According to SPINS data, U.S. retail sales of refrigerated veggie burgers fell 26% year over year in the 52-week period ended April 20. Retailers have been reducing their assortments and carrying fewer products as consumers have moved away from the category.
The other problem is the lack of differentiation. Beyond Meat’s products aren’t much different from the smorgasbord of competing brands available. In a booming market for plant-based meat alternatives, a rising tide lifted all boats. In the current environment, it has become clear that Beyond Meat has no pricing power.
Beyond Meat reported a 13.3% revenue decline in the third quarter, along with an anemic 10.3% gross margin and a substantial net loss of $110.7 million on sales of just $70.2 million. Unit volumes fell, as did average prices, as the company struggled to move merchandise. Beyond Meat’s guidance left a lot to be desired, calling for revenue of between $60 million and $65 million in the fourth quarter.