A surge in demand could provide some needed relief for Beyond Meat, whose revenue depends heavily on food service and restaurant businesses.
More CoverageDonald McLee, an analyst at Berenberg Capital Markets, said the company has found a “perfect storm” with the specter of a meat shortage combined with Beyond Meat’s announcement last week of a deal with Starbucks Corp. to introduce its products in China.
“On top of them expanding internationally ahead of expectations, there’s also this window for them to capitalize on a shortfall of traditional meat,” he said. “That’s why I think you’ve been seeing the stock trade up a lot more.” Parikh sees Beyond Meat’s exposure to the beleaguered restaurant sector as a potential threat to its performance going forward. Oppenheimer slashed its sales estimates for the company this month.In a March filing, Beyond Meat said it generated $153 million in 2019 revenue from its restaurant and food service channels, or about 51% of total net sales.
Parikh and McLee noted short sellers have a particular interest in the stock, and a short squeeze could have inflated last week’s move.
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