Down 79% so far in 2022, Beyond Meat's (BYND -3.90%) stock price decline has far outpaced the S&P 500, which is down a relatively milder 20% over the same time frame. But while the lower stock price might whet the appetite of deal-hungry investors, shares in this food company are pricier than they look on the surface. Let's dig deeper.

Sales are tanking 

Beyond Meat's third-quarter earnings highlight some alarming trends. Instead of growing, the business is deteriorating. Revenue tanked 22.5% to $82.5 million -- a trend CEO Ethan Brown blames on macroeconomic challenges like inflation. But it goes deeper than that. Beyond Meat simply lacks a robust economic moat, which is the competitive advantage that separates a company's products from competitors. 

According to the Good Food Institute, there are over 60 plant-based meat brands with over $500,000 in sales. This means that Beyond Meat's core business isn't unique or difficult to replicate.

Plant-based meat product in a supermarket.

Image source: Getty Images.

Further, the company isn't only competing with alternative meats. It also must contend with actual beef -- a product that is more familiar to consumers, cheaper, and better tasting (depending on whom you ask).

The Washington Post reports that plant-based beef is twice as expensive as the conventional alternative. And it could take years for alt-meat companies to attain enough scale and technological improvements to close the gap. With these problems in mind, blaming Beyond Meat's problems on inflation sounds like the understatement of the year.

Profitability is nowhere in sight 

In the third quarter, Beyond Meat generated a gross loss of $14.8 million, which means it cost the company more to produce and distribute its meat products than it earns from actually selling them -- before including operating outflows like marketing or research and development. To make matters worse, management's hands look tied in fixing the problem. 

Beyond Meat's products are already cost uncompetitive with traditional meat. So if the company raises prices, it will continue to lose market share. But if prices stay where they are, it will continue to bleed money. Operations burned through $89.7 million in the third quarter. And with just $390.2 million in cash and equivalents, Beyond Meat may need to raise external capital from debt or equity markets, which can hurt investors by limiting their claim on the company's future earnings.

So far, the shares outstanding have been remarkably stable, increasing by less than 1% to $63.7 million year over year. But the company may struggle to maintain its discipline as it continues to burn through liquidity.

The stock isn't that cheap

While Beyond Meat's massive declines may make it look cheap on the surface, it actually isn't. The company's price-to-sales (P/S) multiple of 2.1 is slightly lower than the S&P 500 average of 2.3. But that is still far too much to pay for a company with declining revenue that doesn't even generate gross profits. Investors should avoid the shares because of the risk of continued downside over the long term.