Plant-Based Products Will Capture Secular Global Demand

Key Takeaways

• Expanded shelf presence and increased brand placement could rapidly accelerate retail sales, helping reclaim market share and boost revenue.
  
• Enhanced internal operations and clean-label innovation position Beyond Meat for improved margins and long-term, sustainable growth as consumer and institutional demand shifts.
  
• Ongoing demand softness, unprofitability, competitive pressures, unfavorable pricing, and regulatory risks threaten Beyond Meat's revenue growth, market position, and future earnings prospects.

Catalysts

A plant-based meat company, engages in the development, manufacture, marketing, and sale of plant-based meat products under the Beyond brand name in the United States and internationally.

• While analyst consensus expects distribution gaps to close and core products to recover, this likely understates the volume inflection-comprehensive brand block placements and frozen aisle consolidation could sharply accelerate U.S. retail velocity, delivering a step-change in revenue as lost shelf space is rapidly reclaimed and expanded.
  
• Analysts broadly agree that production rationalization and facility upgrades will modestly boost margins, but with the intensified transformation led by seasoned operators and full in-house manufacturing control, Beyond Meat is poised for unprecedented cost efficiency, potentially driving gross margins well above prior peaks and accelerating path to positive EBITDA.
  
• Beyond's pivot to products emphasizing clean labels, macronutrient density, and protein innovation directly aligns with the fastest-growing consumer health trends-this category leadership, coupled with the shift beyond traditional meat analogs, could unlock significant new addressable markets and deliver sustainable, premium-priced revenue growth.
  
• As governments and multinationals intensify carbon reduction mandates and sustainability procurement, Beyond Meat is uniquely positioned to secure high-volume, long-term institutional contracts-these tailwinds could translate directly to large, recurring global revenue streams and increased pricing power.
  
• Rising volatility in global animal protein markets, including susceptibility to disease, climate-driven supply shocks, and structurally higher meat input costs, is set to disproportionately benefit scalable, tech-driven plant-based players like Beyond Meat, turbocharging top-line growth and underpinning margin resilience as the pricing gap closes and eventually reverses in favor of alternative proteins.

Beyond Meat Future Earnings and Revenue Growth

Assumptions

• This narrative explores a more optimistic perspective on Beyond Meat compared to the consensus, based on a Fair Value that aligns with the bullish cohort of analysts.
• The bullish analysts are assuming Beyond Meat's revenue will grow by 6.9% annually over the next 3 years.
• Even the bullish analysts are not forecasting that Beyond Meat will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate Beyond Meat's profit margin will increase from -52.3% to the average US Food industry of 6.3% in 3 years.
• If Beyond Meat's profit margin were to converge on the industry average, you could expect earnings to reach $23.1 million (and earnings per share of $0.25) by about August 2028, up from $-157.5 million today. The analysts are largely in agreement about this estimate.
• In order for the above numbers to justify the price target of the more bullish analyst cohort, the company would need to trade at a PE ratio of 27.1x on those 2028 earnings, up from -1.3x today. This future PE is greater than the current PE for the US Food industry at 20.4x.
• Analysts expect the number of shares outstanding to grow by 7.0% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 12.27%, as per the Simply Wall St company report.

Beyond Meat Future Earnings Per Share Growth

Risks

• Persistent and broad-based softness in the plant-based meat category, coupled with consumer skepticism towards ultra-processed foods and a shift towards minimally processed ingredients, threatens ongoing demand and could result in continued or worsening revenue declines over the long term.
  
• Beyond Meat's ongoing inability to achieve profitability, as evidenced by years of negative net margins, high fixed operating costs, and increased pressure from lowering volumes, raises the risk of further gross margin compression and constrained future earnings.
  
• Market saturation, frozen retail shelf dislocations, shrinking shelf space, and increased competition from traditional meat producers and new plant-based entrants have all contributed to declining or stagnant top-line growth, putting further pressure on revenues and long-term growth prospects.
  
• Macroeconomic uncertainty and inflation are driving consumers toward lower-priced staples, while Beyond Meat's products remain priced at a premium to animal proteins, increasing the risk that their revenues will remain under pressure and margin recovery will be difficult in an environment where price sensitivity persists.
  
• Intensifying scrutiny of the environmental impact of industrial food processing and the potential for regulatory headwinds, such as increased restrictions on labeling or health claims, could erode Beyond Meat's sustainability advantage and marketing reach, reducing investor appeal and limiting future revenue and earnings potential.

Valuation

• The assumed bullish price target for Beyond Meat is $4.74, which represents two standard deviations above the consensus price target of $2.76. This valuation is based on what can be assumed as the expectations of Beyond Meat's future earnings growth, profit margins and other risk factors from analysts on the bullish end of the spectrum.
  
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $5.0, and the most bearish reporting a price target of just $2.0.
  
• In order for you to agree with the bullish analysts, you'd need to believe that by 2028, revenues will be $368.6 million, earnings will come to $23.1 million, and it would be trading on a PE ratio of 27.1x, assuming you use a discount rate of 12.3%.
  
• Given the current share price of $2.66, the bullish analyst price target of $4.74 is 43.9% higher.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.