What Happened?

Shares of plant-based protein company Beyond Meat (NASDAQ:BYND) fell 9.4% in the afternoon session after the company reported underwhelming fourth-quarter results: EBITDA missed significantly, and its gross margin fell short of Wall Street's estimates. Adding to the disappointment was guidance, with full-year revenue guidance coming in below expectations. 

On the other hand, Beyond Meat beat analysts' revenue expectations this quarter. However, cost pressures remain. Beyond Meat is focusing on cost control to stabilize its financial position with additional restructuring initiatives, including a workforce reduction and the suspension of operations in China. Overall, this quarter could have been better.

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What The Market Is Telling Us

Beyond Meat’s shares are extremely volatile and have had 45 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business. 

The biggest move we wrote about over the last year was 12 months ago when the stock gained 89.4% on the news that the company reported impressive fourth-quarter results, which blew past analysts' revenue expectations. 

On the other hand, its full-year revenue guidance missed analysts' expectations and its operating margin missed Wall Street's estimates. What seems to be the saving grace and reason for the stock action, though, is the company's 2024 gross margin and implied operating profit guidance. Beyond Meat is calling for gross margin in the "mid to high teens range for the full year 2024", which is much better than Wall Street's projection of roughly 7%. 

Additionally, the company's guidance calls for a smaller operating loss than Wall Street expected. Overall, the results were fine and the guidance is highly comforting.

Beyond Meat is down 17.4% since the beginning of the year, and at $3.18 per share, it is trading 70.3% below its 52-week high of $10.69 from February 2024. Investors who bought $1,000 worth of Beyond Meat’s shares 5 years ago would now be looking at an investment worth $29.96.

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