Plant-based food company Beyond Meat (NASDAQ:BYND) offered up a tasty profit in the third quarter, besting analysts' expectations for earnings and revenue. Beyond reported net income for the quarter of $4.1 million, or $0.06 per share, up from a loss of $9.3 million, or $1.45 per share, a year earlier. Total sales soared 250% to $92 million, and its revenue has more than tripled from last year.

Sounds as rosy as the new marbling on its Beyond Burgers, right? So why did its shares sink 20%?

A hand holding Beyond burgers in a grocery store

Image Source: Beyond Meat

There are a few things in play. Let's take a closer look.

1. Doubts about trial with McDonald's

First, some analysts are not keen on the results of Beyond Meat's trial with McDonald's (NYSE:MCD) in Canada. Although initial feedback on the trial is positive, "it seems the trial has not been a blowout success thus far," according to Bernstein analysts. Jonathan Maze, executive editor of Restaurant Business Magazine, expressed skepticism about the trial, citing logistical challenges for a broader rollout. (Beyond Meat CEO Ethan Brown responded to those concerns, saying he is "very optimistic about the long-term relationship" with McDonald's.)

2. Initial investor sell-off

Second, and perhaps more of a factor in Beyond Meat's shares sinking, Monday is the first time since its initial public offering that insiders could sell the stock. In other words, fears of significant sales by early investors looking to cash out are driving the sales down now that the lock-up period has expired.

3. Fears about more competition

Third, Beyond Meat is facing increased competition from the likes of privately held Impossible Foods as well as traditional food companies like Tyson Foods (NYSE:TSN), Kellogg (NYSE:K), and Nestle (OTC:NSRGY). Nestle launched its Awesome Burger, and Kellogg now offers the Incogmeato brand of plant-based foods.

Beyond these issues

But beyond all this, the future for Beyond Meat looks bright. Certainly, the CEO is optimistic. In an interview with Forbes, Brown notes that the company is on track to become the world's dominant protein company. He points to partnerships not only with McDonald's, but Dunkin' (NASDAQ:DNKN) and Denny's. (Denny's signed an agreement to introduce the Denny's Beyond Burger, and Dunkin' offers the Beyond Sausage Breakfast Sandwich in Manhattan with plans for a future rollout.)

And the CEO says he's not selling his shares after the initial lockup and he's focused on growing Beyond Meat to a $40 billion company in terms of revenue. He cites innovation as the most important factor in Beyond Meat staying ahead of its competitors.

There are multiple reasons to share Brown's optimsm. After the scary 20% drop Monday, the stock is beginning to recover. (It dropped from its high on Monday of $106.97 to a low of $82.96 Tuesday.) Beyond Meat is trading at around $89 even as the Dow Jones Industrial Average and the S&P index have both declined. So fears of a big cash out might have been overblown.

As to concerns about the competition, Beyond Meat has the precious first-mover advantage. The company has been around for 10 years -- two years longer than Impossible Foods -- and other traditional food manufacturers are scrambling to compete. Plus, the trial with McDonald's is quite promising; a larger, perhaps national roll-out would be blockbuster.

And it can't be discounted that Beyond Burgers are delish!

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.