Beyond Meat, Inc (NASDAQ: BYND) shares have advanced from $102 above $150 since 19th May 2021, and the current price stands around $145.
Fundamental analysis: Lots of positive expectations have already been included in the stock price
Beyond Meat is a Los Angeles-based producer of plant-based meat substitutes with products designed to emulate chicken, beef, and pork sausage. Beyond Meat shares are advancing last several weeks amid increased interest on the popular Reddit WallStreetBets forum.
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Bank of America is tracking the top stocks mentioned on Reddit, and Beyond Meat had a fourth place at the beginning of June, just behind GameStop, AMC Entertainment, and Virgin Galactic. Beyond Meat shares could advance even more, but the current risk/reward ratio is not good for long-term investors, and there are certainly better investment opportunities at the moment.
Beyond Meat reported its first-quarter results in the first week of May; total revenue has increased by 11.4% Y/Y to $108.16 million, while the GAAP EPS was -$0.43 (misses by $0.27). Total revenue has increased below the expectations (-$5 million) mainly due to the Covid-19 pandemic, but the company expects second-quarter net revenues to be in the range of $135 million- $150 million (an increase of 19% to 32% Y/Y).
Beyond Meat began the second quarter in a solid position, but the global COVID-19 pandemic continues to pose downside risks to the recovery.
“Due to the COVID-19 pandemic, the company continues to experience significantly reduced demand in its foodservice channel as decreased foot traffic, streamlined menu offerings, and restrictions on foodservice locations’ operating capacity have resulted in closures or meaningfully curtailed operations of many of the company’s foodservice customers,” said President and CEO Ethan Brown.
Lots of positive expectations have already been included in the stock price, and there are some apparent risks when it comes to trading this stock currently. The company’s EBITDA is negative, the book value per share is less than $5, and the recently issued $1.15 billion convertible bonds can create a debt issue.
Technical analysis: Beyond Meat shares have exploded since 19st May
Beyond Meat shares have exploded since 19th May, the price has advanced more than 50%, but financial results certainly don’t justify this jump.
If the price falls below $140 support, it would be a firm “sell” signal, and the next target could be around $130. On the other side, if the price jumps above $160 resistance, it would be a signal to trade Beyond Meat shares, and the next target could be around $170.
Beyond Meat shares are advancing amid increased interest on the popular Reddit forum, but the current risk/reward ratio is not good for long-term investors. Many positive expectations have already been included in the stock price; still, if the price jumps above $160 resistance, the next target could be around $170.
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