Beyond Meat’s Shares Plummet in Spite of Positive Q3 Earnings

The company’s shares fell more than 20% in spite of positive earnings and guidance.

On Monday, Beyond Meat reported its fiscal third-quarter earnings, and the results were everything investors could have hoped for. The company exceeded Wall Street’s expectations on earnings and revenue. 

And Beyond Meat continues to form new partnerships with grocery stores and restaurants, which is a strong indicator of continued growth. The company is currently testing out partnerships with McDonald’s, Subway, and KFC.

In spite of all this good news, Beyond Meat’s stock fell more than 15% midway. The company did recoup some of these losses, only to have its shares fall more than 20% on Tuesday. 

Understanding the stock’s recent volatility

Beyond Meat has been a very volatile stock since it first went public last May. The shares immediately took off, and at one point, reached a 52-week high of $239.71. That’s quite a jump from the company’s IPO price of $25 per share. 

According to Barron’s, this makes the company one of the most heavily shorted stocks on the market. Beyond Meat has grown so quickly, and its valuation is so high, most investors believe a drop is inevitable. 

And to add to this uncertainty, millions of the company’s shares will come out of lockup this week. As of Tuesday, insiders can sell the stock for the first time since the company went public. This adds an additional layer of pressure, as many investors anticipate a big wave of trading.  

However, there is one person who won’t be selling their shares, and that’s Beyond Meat’s CEO Ethan Brown. Brown has already stated that he has no plans to sell any of his shares, and is focusing his efforts on growing the company.

The future is bright for Beyond Meat

In spite of the recent stock volatility, there is a lot to be excited about when it comes to Beyond Meat. The company continues to grow at a rapid pace, and its net sales are up 250%. And the company continues to thrive, in spite of increased competition in the marketplace.

On a conference call with investors, Brown largely dismissed concerns over increased competition. He pointed out that competition is inevitable, and that the company has been preparing for this for years. 

Brown is focused on building Beyond Meat to an international company and bringing the company’s revenue to $40 billion. And if this latest earnings report is any indication, there is a strong possibility that could happen.