Beyond Meat a Zombie Stock

The market isn't showing Beyond Meat much love. Amid ongoing lawsuits and shareholder complaints, the second quarter wrapped with MarketWatch reporting Beyond Meat had not only continued to see net losses but had announced large-scale layoffs.

Beyond Meat Inc. posted a net loss of $97.1 million ($1.53 per share) for this latest quarter. That's after a net loss of $19.7 million (0.31 cent per share) for the same quarter in 2021. MarketWatch reported net revenue, at $147 million, had declined 1.6% from its $149.4 million level seen last year.

In a statement addressing the announcement, Ethan Brown, chief executive for Beyond Meat, said: "With the recent, dramatic decline in consumer buying power, the importance of delivering on our price parity targets is magnified. We take note of this powerful reminder and continue to advance as well as broaden cost reduction activities in service to realizing price parity."

Brown noted that a 4% reduction in workforce was planned, which would save the company an estimated $8 million annually.

"We recognize progress is taking longer than we expected, notwithstanding the increasing urgency and importance of our opportunity," added Brown. "Our transition to mass market consumption will occur as we actualize our vision ..."

DTN recently reported on a proposed class action suit against the company, filed in Illinois in May. The civil action is on behalf of all consumers who bought Beyond Meat products and lists seven counts as part of the complaint, including false and misleading statements per the maker's products' protein content levels.

Plaintiffs' own testing, according to the complaint, showed for example, that the Beyond Beef Plant Based Ground 16-ounce patties, labeled as having 20G Per Serving and a 40% DV (daily value) for protein, actually contain 19G protein per serving and just 7% DV for protein. This, states the complaint, is an "underfill of 5% for protein content and an underfill of 33% for percent DV of protein."

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ZOMBIE STOCKS

Beyond Meat was added to a list of "zombie stocks" by independent equity research firm New Constructs. The firm uses models and machine learning to make its projections, and it reported that Beyond Meat has a high risk of declining to $0 per share.

New Constructs CEO David Trainer released a note regarding Beyond's Zombie status, noting that the company "must drastically cut costs and lower its cash burn, or it will go bankrupt." He added that companies with what he called "heavy cash burn" and not a lot of cash on hand, are risky as rates rise.

"Beyond Meat has failed to generate any positive free cash flow since going public in 2019," he wrote.

DTN Editor Emeritus Urban C Lehner recently wrote about the potential market share for cultured and plant-based products. See his article here: https://www.dtnpf.com/….

Victoria Myers can be reached at vicki.myers@dtn.com

Follow her on Twitter @myersPF

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