Cost Controls And Retail Expansion Will Drive Opportunity Despite Industry Challenges

Key Takeaways

• Streamlined operations, manufacturing investments, and portfolio optimization aim to boost margins and shift the company toward sustained profitability and positive cash flow.
  
• Renewed retail partnerships and innovative product launches target increased shelf presence, stronger brand perception, and broader, more sustainable revenue growth.
  
• Declining demand, persistent high prices, brand skepticism, mounting losses, heavy debt, and rising competitive and operational risks threaten Beyond Meat's long-term growth and financial stability.

Catalysts

A plant-based meat company, engages in the development, manufacture, marketing, and sale of plant-based meat products under the Beyond brand name in the United States and internationally.

• Beyond Meat is accelerating operational efficiency efforts-including substantial cost reduction, portfolio optimization, and manufacturing investments-which are expected to improve gross margins and drive the company toward EBITDA-positive operations; this will benefit future net income and operating cash flow.
  
• Strategic focus on rebuilding core product distribution and brand blocks at high-impact U.S. retailers, together with new retail partnerships expected later this year, positions the company to regain lost shelf space and increase product velocity, supporting top-line revenue recovery over the medium term.
  
• Ongoing product development efforts-such as the launch of innovative clean-label, high-protein offerings (e.g., Beyond Ground)-align with rising consumer demand for nutritious, plant-based food and could help reshape brand perception, broadening the addressable market and stimulating sustainable revenue growth.
  
• Long-term trends of increasing regulatory pressure and consumer focus on environmental sustainability favor plant-based protein producers, suggesting potential for new incentives, category tailwinds, or policy-driven demand expansion, underpinning future sales and market share growth.
  
• Continued emphasis on manufacturing cost reduction and operational right-sizing, aided by the newly appointed Interim Chief Transformation Officer, supports a path to structurally lower costs of goods sold and enhanced fixed cost absorption, directly improving gross and net margins.

Beyond Meat Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming Beyond Meat's revenue will decrease by 0.1% annually over the next 3 years.
• Analysts are not forecasting that Beyond Meat will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate Beyond Meat's profit margin will increase from -51.0% to the average US Food industry of 6.2% in 3 years.
• If Beyond Meat's profit margin were to converge on the industry average, you could expect earnings to reach $18.6 million (and earnings per share of $0.2) by about September 2028, up from $-153.6 million today. The analysts are largely in agreement about this estimate.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 18.1x on those 2028 earnings, up from -1.2x today. This future PE is lower than the current PE for the US Food industry at 19.8x.
• Analysts expect the number of shares outstanding to grow by 7.0% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 12.32%, as per the Simply Wall St company report.

Beyond Meat Future Earnings Per Share Growth

Risks

• Persistent softness in the plant-based meat category, especially in the U.S. retail channel and international foodservice, points to a secular decline in core demand for Beyond Meat's products, which risks continued revenue contraction and challenges the company's ability to achieve top-line growth in the long term.
  
• Sustained premium pricing of Beyond Meat's products compared to animal protein, compounded by ongoing inflation and tepid consumer spending, may limit the addressable market to price-insensitive buyers, leading to prolonged volume declines and downward pressure on revenues and gross margins.
  
• Entrenched negative narrative and consumer skepticism about the healthfulness and processing level of plant-based meat alternatives have proven difficult to reverse, risking brand erosion and long-term difficulties recapturing lapsed flexitarian consumers, which could suppress future revenue and customer recovery.
  
• Weak gross margins due to poor fixed-cost absorption and unfavorable product mix, combined with recurring net losses, operating cash outflows, and sizeable debt (~$1.2B with a 2027 note maturity), threaten Beyond Meat's ability to reinvest, maintain competitiveness, and could result in financial distress that impacts net earnings and viability.
  
• Heightened competitive pressures from both established food companies and new entrants in the alternative protein sector, combined with operational setbacks like the suspension of China operations, shrinking retail shelf space, and potential regulatory headwinds, increase risks of market share loss and further revenue, margin, and earnings deterioration.

Valuation

• The analysts have a consensus price target of $2.566 for Beyond Meat based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $4.0, and the most bearish reporting a price target of just $2.0.
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $300.3 million, earnings will come to $18.6 million, and it would be trading on a PE ratio of 18.1x, assuming you use a discount rate of 12.3%.
• Given the current share price of $2.32, the analyst price target of $2.57 is 9.6% higher. Despite analysts expecting the underlying buisness to decline, they seem to believe it's more valuable than what the market thinks.
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.