Despite some encouraging growth signs, Wall Street still has little taste for Beyond Meat (BYND -1.79%) stock.

The good news is the plant-based meat specialist is making progress in its turnaround plan. Margins are improving, and inventory levels are much lower than they were a year ago. Yet the stock is still underperforming the market by a wide margin. Shares are down over 40% so far in 2023 compared to a 19% spike in the S&P 500.

Those declines are well deserved. Even though Beyond Meat might look tempting after its big discount this year, most investors will want to avoid the stock. Here's why.

1. Surprising demand slump

Beyond Meat's industry has been contracting for more than a year now, yet management still doesn't have a good grasp on where demand trends are headed. "We are disappointed by our overall results," CEO Ethan Brown said in an early November press release.

Sales in Europe were a bright spot, but the core U.S. business was a different story. Sales dropped a brutal 34% in the retail segment that serves grocery stores. Revenue was also down 22% to restaurant chains.

Its gross profit margin did improve, rising to a 9% loss from an 18% loss. But Beyond Meat's sales still suffered from the combination of lower demand and falling prices. In the past nine months, sales are down 20% across the business, to $270 million.

2. Costs are still too high

Despite aggressive restructuring moves and deep cost cuts over the last several quarters, Beyond Meat is still far from being a sustainable business. Operating losses have only improved to $181 million, or 67% of sales so far in 2023. They were sitting at 82% of sales a year ago.

Beyond Meat isn't earning a profit even on a gross basis, which means costs will have to plunge further before investors can expect a reasonable shot at profitability. The good news is that management is taking the challenge seriously and considering some bigger restructuring moves in the coming quarters. "We are conducting a review of our global operations," Brown assured investors.

The result of this review will likely be a plan for much lower operating costs. But that's not a reason to buy the stock, absent rebounding demand trends.

3. Better choices

Inventory levels are lower than they were a year ago, which is another solid sign of progress toward ending Beyond Meat's multiyear earnings slump. And shares are priced at a solid discount today. You can own the stock for just over 1 times sales, down from highs of closer to 3 times sales at several points earlier in 2023. For context, PepsiCo stock is valued at 2.5 times annual revenue.

There are still too many other good options in the consumer foods space to prefer over Beyond Meat today. Pepsi is highly profitable and growing organic sales at a double-digit rate, for example. Its food segment is enjoying solid demand thanks to innovations across its snack and breakfast choices. And Pepsi pays a generous and growing dividend that's likely to buffer shareholders' returns even during relatively weak selling environments.

With attractive choices like these available, investors should leave Beyond Meat stock on the shelf right now as the company continues trying to find a way forward in a shrinking industry.