Beyond Meat’s latest earning reports are out, and the situation looks … well, let’s say “less than ideal”. The numbers are down, they missed a bunch of marks, and the investing community feels a bit betrayed.
Am I selling out of my BYND position? Should you sell? Is there still a future for Beyond Meat? All of this and more.
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Hello everyone, and welcome back to Investing with Antoaneta. Today I’m bringing you a quick update on Beyond Meat stock’s latest earnings report. This blog will probably end up being a tad shorter than my usual stock blogs, but I really feel like I need to publish it as soon as possible. Now, I recently posted a blog about BYND, and if you are not really familiar with the company, I suggest that you go and read this first, “BYND Meat In Your Portfolio 2020“.
First things first, let’s take a look at what Beyond Meat reported:
- A $0.27 miss on EPS for Q4
- A 2.17-million-dollar miss on revenue
- A 6.1% miss on gross margin
- And, of course, loss of revenue.
Naturally, a lot of people are upset by this. I see a lot of disappointed investors out there considering selling out of their BYND positions. And I do understand how they feel, especially if they are new to the market or were super hyped up for the company. But here’s the thing:
I don’t see this as a valid reason to sell my shares. As a matter of fact, if the prices drop low enough, I might even use this opportunity to add more BYND to my portfolio. Wanna know why? Well, why don’t you keep watching and find out?
What does the report tell us?
Retail Revenue
- US Retail revenue up by 76.3% year-over-year
- International Retail revenue up by 139.2%
Food Services Revenue
- US Food Services Revenue down by 42.6%
- International Food Services Revenue down by 62.9%
Additionally, even though Beyond Meat saw losses, they are heavily investing in R&D and manufacturing. On the earnings call, Ethan Brown (the CEO and Founder of Beyond Meat) said that he sees these investments as very necessary. He wants to establish Beyond Meat as the number one international player in the field and to achieve this, they need to always keep growing.
In the short-term, Beyond Meat probably isn’t going to blow up overnight. That much is obvious. But are you here for the short term, or are you looking at the future?
Why is this happening?
Well, let’s see:
- A lot of restaurants and public diners are closed right now.
- A lot of people are hesitant to visit the ones that are open.
Yup, that’s right – the lockdowns strike again! And, to top it all off, the year-over-year report compares data from before the whole thing started to data collected during the issues.
You see, Beyond Meat’s business model relies on two separate “divisions”: the retail (stores) division and the food services division. Basically, half of the business suffered because of an issue that’s entirely outside of their control.
Am I selling my BYND shares? Should you sell?
Well, as I already said, I don’t see any valid reasons to sell here. Instead, I’m actively looking for a good opportunity to add more BYND to my portfolio. Why am I doing that?
Because I’m a long-term investor. I know that the short-term stuff rarely affects the bigger picture. I’ve also done a lot of reading on this company, I understand the business model, and I am a big believer in Beyond Meat’s future.
Why I see long-term promise in Beyond Meat
- I believe in Beyond Meat’s vision. Meat replacements definitely have a place in the diet of the future, especially with the push towards sustainability.
- They managed to dramatically increase their brand presence in less than a year. Beyond Meat boasts a 267% growth in unaided brand awareness from the moment it IPO’d to January 2021.
- They are securing more and more partnerships with key players in the food industry. Recently, they announced that they will be working with McDonald’s and Yum! Brands (owners of KFC, Pizza hut, Taco Bell, and more). That’s incredibly impressive, given just how new and small Beyond Meat is at the moment.
- Restaurants are going to reopen eventually. That’s just an obvious fact. And, once they do, people will start to eat out again, and we won’t be getting report situations like this last one anymore.
So, in closing, here are the key takeaways from this blog:
- Don’t base your investing decisions on what other people say.
- Don’t base your investing decisions on the report headlines.
- Don’t fall into the trap of the short-term mindset (if you are a long-term investor)
- Look deeper, form your own opinion, and the reason it out.
- Do not sell out of your positions as soon as a bit of negative news comes out (if you want to be successful in the long-term)
If you’re really serious about your investing career, you might want to check out our Private Investing Group. We’ve got a ton of in-depth content, exclusive stock analysis videos, a chat where you can ask your questions in real-time, and more. To apply, just follow the link in the description.
And that about wraps it up today. If you enjoyed the blog regarding Beyond Meat, please don’t forget to give it a like and share it on social media. Thank you all for watching, and until next time!
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Recommended books for further reading:
- How to Make Money in Stocks: A Winning System In Good Times And Bad
- How to Day Trade for a Living: A Beginner’s Guide to Trading Tools and Tactics, Money Management, Discipline and Trading Psychology
- The Warren Buffett Way
- Warren Buffett and the Interpretation of Financial Statements: The Search for the Company with a Durable Competitive Advantage
- A Beginner’s Guide to the Stock Market: Everything You Need to Start Making Money Today
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Very informative article. You’ve done your research and you make a good point