Shares of Beyond Meat (BYND) got burned on Friday. The stock plunged as much as 15.7%, before clawing back some of its losses.

Investors were digesting the fourth-quarter earnings report for the maker of plant-based meat substitutes, and it gave them a case of heartburn. Given the company's declining financial performance, is Beyond Meat stock a buy or should investors clear the table?

Context matters

Beyond Meat reported a perfect storm of bad news. Declining revenue put pressure on its margins, which ultimately ate into the bottom line. While it might appear that there was no good news in the report, it's important to step back and look at the bigger picture.

Young family barbecuing in the back yard.

Image source: Getty Images.

Management explained that the company had invested heavily during the quarter, adding workers, increasing its international footprint, and scaling up its production capabilities. This combination of factors "weighed heavily" on both the company's gross margin and operating expenses, which in turn hurt the bottom line. 

The upside to these investments is that Beyond Meat will be able to boost its production in the U.S., Europe, and China, while simultaneously allowing the company to increase supply to key strategic partners. While this spending will be a drag on Beyond Meat's results over a quarter or two, over the longer term it will help the company meet rising demand.

There were other glimmers of hope in the report. Management noted that the number of product tests and menu additions by quick-service restaurants are on track. The company also achieved strong growth in international markets last year, even as supply chain issues caused more sporadic growth here at home.

It's also easy to forget that since 2018, Beyond Meat has grown its sales by 428% -- a compound annual growth rate of 74% -- which is impressive by any standard. 

The company's growing scale will ultimately enable the company to close the price gap between meat products and plant-based substitutes, which will encourage more consumers to make the switch. Beyond Meat is playing the long game, and shareholders will need to do the same.