Beyond Meat (BYND 5.13%), a producer of plant-based meat products, was once a hot growth stock. After going public at $25 per share in May 2019, its stock soared to a record high of $234.90 the following month. But today, its stock trades at less than $1. Let's see why this former hypergrowth stock became a penny stock -- and where it might end up by 2027.
Image source: Getty Images.
Why did Beyond Meat's stock collapse?
In 2019, Beyond Meat's revenue soared 239% as restaurants, retailers, and consumers eagerly tried out its plant-based meat products. Yet in 2020, its revenue rose only 37% as the pandemic drove restaurants to close and retailers to be more selective with their product offerings. Many cost-conscious consumers also shifted back toward cheaper animal-based meat products.
NASDAQ: BYND
Key Data Points
Beyond Meat expected its growth to accelerate again as the pandemic passed, but its revenue increased just 14% in 2021 before declining 10% in 2022, 18% in 2023, and 5% in 2024. Analysts expect another 15% drop for 2025 when it posts its full-year earnings on March 4.
Beyond Meat struggled to recover as inflation curbed its pricing power, the market's interest in plant-based meat dissipated, and fierce competitors -- including Tyson (TSN +1.72%) and Impossible Foods -- fragmented the shrinking market. It hastily liquidated its inventory with markdowns as its growth stalled, but that desperate strategy reduced its gross margin from 33.5% in 2019 to 12.8% in 2024. A failed joint venture with PepsiCo (PEP 0.46%) to sell plant-based jerky exacerbated that pressure, and it remains deeply unprofitable.
To stay solvent, Beyond Meat has increased its outstanding share count by 678% since its IPO. That dilution will likely continue for the foreseeable future. Its stock initially seems like a bargain at 1.6 times its 2026 sales, but it might deserve that discount valuation.
Where will Beyond Meat's stock be in 2027?
To stabilize its business, Beyond Meat is streamlining its portfolio, raising prices to offset declining shipments, and experimenting with new products such as protein shakes. Analysts expect its revenue to fall another 1% in 2026 before rising 1% in 2027. The company also aims to expand its gross margins, gradually narrow its net losses, and reduce its debt.
Beyond Meat isn't down for the count yet, but I expect its stock to either stagnate or slip lower over the next year. It simply faces too many existential challenges, and it won't attract too many buyers in this turbulent market, which favors higher-growth stocks or stable blue chip plays.
