Why Investors Bailed on Beyond Meat Last Month

Beyond Meat (NASDAQ: BYND) stock obeyed gravity in May, dropping by almost 20% after an April that saw it gain more than 40%. The low-priced -- and therefore frequently volatile -- company was particularly affected by the latest in a string of disappointing quarterly earnings reports.

Not a very tasty month

Beyond Meat unwrapped its first-quarter results on May 6, and some of those numbers sparked justified concern in the market. The company's net revenue sank by 15% year over year to just over $58 million. On a brighter note, it narrowed its net loss; however, it was still deeply in the red. That shortfall, not under generally accepted accounting principles (GAAP), was $46.8 million ($0.10 per share) compared to first quarter 2025's $59 million deficit.

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Both headline results missed the consensus analyst estimates. Prognosticators tracking Beyond Meat were, as a group, modeling $59.6 million for revenue, and a narrower non-GAAP (adjusted) net loss of $0.07 per share.

Breaking down its sales by weight, Beyond Meat reported that its net revenue per pound rose by more than 5% over the one-year stretch. That, however, didn't come close to mitigating the nearly 20% slide in volume of products sold, a key metric for the food company. Worse, in its two sales channels -- retail and food service -- the company booked declines, both in this country and in international markets.

One admirable aspect of Beyond Meat's operations is that it's recently, well, gone beyond meat (or, to be exact, imitative plant-based meat products). In January, it announced Beyond Immerse, a line of sparkling protein drinks made with plant-based ingredients. These beverages, which also contain healthy amounts of fiber, are now available in seven flavors, including cherry berry and strawberry lemonade.

Determined competition

The major, and continuing, problem for Beyond Meat is that it's now one of a crowd of businesses producing alt-meat products. And its competitors include hungry upstarts, such as the privately held Impossible Foods, and well-capitalized sector incumbents, such as Hormel Foods. While I wouldn't go so far as to say that fake meat products are commoditized, they aren't rare items either in this day and age.

Investors welcomed the pivot into beverages, but this isn't a market bursting with opportunity. There are a vast number of drink brands already on store shelves and restaurant menus, and among these are many health-friendly options. Beyond Immerse, then, is a late arrival in a space that's already well crowded.

I think there is much to be concerned about with Beyond Meat's legacy business, and I'm not seeing immense potential in the new liquid line. Combined, these factors would keep me well away from the company's stock.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Beyond Meat. The Motley Fool has a disclosure policy.