It’s been a sad week for Beyond Meat, Inc. (NASDAQ:BYND), who’ve watched their investment drop 15% to US$125 in the week since the company reported its quarterly result. Revenues fell badly short of expectations, with sales of US$94m missing analyst predictions by 29%. Unsurprisingly, the statutory profit the analysts had been forecasting evaporated, turning into a loss of US$0.31 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We’ve gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Check out our latest analysis for Beyond Meat
Following the latest results, Beyond Meat’s 19 analysts are now forecasting revenues of US$681.4m in 2021. This would be a sizeable 69% improvement in sales compared to the last 12 months. Earnings are expected to improve, with Beyond Meat forecast to report a statutory profit of US$0.65 per share. In the lead-up to this report, the analysts had been modelling revenues of US$748.8m and earnings per share (EPS) of US$0.65 in 2021. So it looks like the analysts have become a bit less optimistic after the latest results announcement, with revenues expected to fall even as the company is supposed to maintain EPS.
It will come as no surprise then, that the consensus price target fell 7.1% to US$122following these changes. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Beyond Meat analyst has a price target of US$180 per share, while the most pessimistic values it at US$55.00. So we wouldn’t be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. With this in mind, we wouldn’t rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of Beyond Meat’shistorical trends, as next year’s 69% revenue growth is roughly in line with 75% annual revenue growth over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 3.1% per year. So it’s pretty clear that Beyond Meat is forecast to grow substantially faster than its industry.
The Bottom Line
The most important thing to take away is that there’s been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Still, earnings are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Beyond Meat’s future valuation.
With that said, the long-term trajectory of the company’s earnings is a lot more important than next year. We have estimates – from multiple Beyond Meat analysts – going out to 2024, and you can see them free on our platform here.
You should always think about risks though. Case in point, we’ve spotted 3 warning signs for Beyond Meat you should be aware of.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected].
