Beyond Meat (BYND 0.95%) was a high-flying stock before and after the pandemic as consumers saw its plant-based meat as a healthy alternative to traditional meat products. Unfortunately for shareholders, the 2022 bear market wiped out most of the company's value as investors turned on money-losing stocks.

Consequently, Beyond Meat has fallen 97% from its all-time high. Two factors could continue a trend that looks increasingly like a death spiral.

1. Plant-based meat is (probably) a fad

Admittedly, the move to plant-based meat substitutes appeared promising. Consumers seemed to respond well to the product, and increasing numbers of restaurants offered products made by Beyond Meat and its chief competitor, Impossible Foods.

With that, the company launched its initial public offering (IPO) in May 2019, and Beyond Meat's share price quickly surged beyond the $25 per share IPO price to over $200. The stock held onto its stellar gains for the next two years as net revenue rose from $88 million in 2018 to $465 million in 2021.

Unfortunately, consumers' attitudes toward plant-based meat quickly seemed to grow stale in the face of high inflation. Last year, revenue fell 10% to $419 million, and through the first three quarters of 2023, it declined another 20% year over year to $270 million.

Results in the U.S. market paint an even grimmer picture as year-to-date sales are down 34%, offset by 17% international growth.

While Beyond Meat launched its first product in the U.S. in 2012, it didn't make a significant push into international markets until 2018. But given what we've learned about its lifecycle in the U.S., it's natural to worry just how sustainable its international growth will be, and that only casts additional doubt on it revenue prospects in the long term.

2. A coming financial spiral

The company's financials make it clear just how dire the situation has become. Through the first three quarters of 2023, Beyond Meat earned a little over $1 million in gross profit, giving it a gross margin of just 0.4%!

Factor in operating expenses, and Beyond Meat reported a $181 million operating loss. That's an improvement from the $277 million lost in the year-ago period, but one has to wonder whether it can ever turn profitable with U.S. sales on the decline.

Furthermore, the company has just under $218 million in cash and equivalents. This likely means it will have to raise money on the capital markets in the near future. It already owes more than $1.1 billion on its convertible senior notes, a level exceeding its $929 million asset base.

Additionally, its share price stands at about $7 as of this writing. The outstanding share count of 64.5 million grew only by about 1% over the last year. Nonetheless, this situation makes raising significant amounts of money challenging without diluting existing shareholders.

Avoid Beyond Meat stock

The challenges Beyond Meat faces are not unique to the company as sales for the entire plant-based meat category are shrinking. With no signs of a U.S. turnaround, a foreboding outlook for international sales, and a weak balance sheet, this alternative meat stock has little to offer even the most bullish investor.