What happened
Shares of Beyond Meat (BYND -1.64%) had tumbled 5.1% as of 1:25 p.m. EDT on Tuesday, after J.P. Morgan cut its price target to $91 a share, and reiterated a rating of underweight on the stock.
So what
That $91 price would have sounded like a gift as recently as a year ago, but Beyond Meat shares have more than doubled over the course of the pandemic, and now trade north of $140, up 136% from their year-ago price.
Just yesterday, Jefferies said that it thinks $140 is a fine price for Beyond Meat stock, which it rates a hold. It says Beyond Meat "retains an advantage over other meat-alternative companies, as one of the first-movers in the space."
Image source: Getty Images.
Now what
I'd focus less on what other investors think (even investment banks), and more on the numbers that Beyond Meat itself reports. And from that perspective, I'm not impressed.
Although sales were up strongly last year, rising 36.6% year over year, Beyond Meat still hasn't figured out how to earn a profit from all its sales success. It lost $53 million last year, its worst earnings year ever, and burned through $115 million in negative free cash flow -- also its worst number ever.
As competition gets stiffer from fellow "new food" companies like Impossible Foods, Tattooed Chef, Soylent, and Huel -- and from traditional food producers offering meatless alternatives -- the time for Beyond Meat to parlay its first-mover advantage into sector-leading profits is running out.
