Beyond Meat Faces Flat Demand In 2025, Path To Profitability Remains Uncertain: Analyst

J.P. Morgan analyst Ken Goldman reiterated an Underweight rating on the shares of Beyond Meat Inc BYND.

In the fourth-quarter, the El Segundo, California-based company exceeded revenue expectations by $1.1 million, although EBITDA fell short of consensus Metrix estimates by $7 million, primarily due to a weaker-than-anticipated gross margin, said the analyst.

The 2025 revenue guidance also underperformed, with the midpoint forecast of approximately $327 million, below the Consensus Metrix estimate of $337 million.

The company projects a gross margin of around 20% for 2025, close to the Street’s expectation of 20.5%. On the operating expenses front, Beyond Meat continues to make progress by announcing additional savings. But the midpoint guidance of $170 million is slightly below the Street's $173 million estimate, Goldman says.

Beyond said its operating expenses would be reduced by $5.5 million to $6.5 million after its plan to cut 44 positions in North America and the EU.

Also Read: Norwegian Cruise Line Sails Past Q4 Expectations: EPS Soars, Margins Expand And Demand Stays Hot

Overall, the analyst does not see significant changes to the consensus EBITDA for 2025, though the revenue outlook is expected to align with the company's guidance.

While revenue is expected to grow (+MSD%) in 2H24, it’s important to note that BYND has a history of missing its guidance.

Over the past five years, the company's sales or gross margin projections have consistently fallen short of initial forecasts. Therefore, investors should be cautious about expecting significant upside from the 2025 guidance provided today, the analyst asserted.

The analyst changes the 2025 EBITDA estimate from -$63 million to -$61 million and for 2026, the estimate is changed from -$44 million to -$39 million.

While demand for its products may improve long-term and the company is well-positioned in the alt-meat market, the analyst thinks the path to profitability remains uncertain, and current demand patterns are flat.

Price Action: BYND shares are trading lower by 9.41% at $3.23 at last check Thursday.

Read Next: