From sizzle to fizzle

They say you are what you eat—and investors who bit into Beyond Meat are feeling a little undercooked.

Beyond Meat finally dropped its delayed Q3 earnings, and the results were hard to digest: the company posted a $110.7 million loss, far worse than last year’s $26.6 million, on $70.2 million in revenue, which—while slightly above expectations—was still down 13.3% YoY. Shares fell 8.61% today, extending a brutal slide for the once-hyped alt-meat pioneer, which hasn’t turned a quarterly profit since 2020 and is now down 99% over the past five years.

The drop boils down to weak demand from both shoppers and restaurants. On the consumer side, US sentiment just hit its lowest level in three years, and with budgets tightening, many are skipping Beyond’s pricier patties. On the restaurant side, fewer distribution points in the U.S. and lower burger sales at fast food restaurants dragged on results. The pain was sharpest at home: US retail and food-service revenue plunged 21%, compared to just a 1% dip internationally.

Meme stock mania

Beyond Meat’s past few months could only be described as meme-stock madness. It all started when retail trader Dimitri Semenikhin posted a bullish analysis of the company’s growth potential on reddit. The hype sent shares soaring 1,300% in four days, before reality hit—taking the stock down 44.53% in the past month and 70.35% year to date.

The comeback looked a lot like GameStop’s 2021 rally, when Keith “Roaring Kitty” Gill and a legion of retail traders sent prices skyrocketing in defiance of Wall Street. This time, Beyond joined a new batch of meme-stock revivals including Krispy Kreme, Opendoor, Rocket Mortgage, and Kohl’s.

The problem is that meme-stock rallies run on crowd psychology, not company performance. And when meme stock hype met earnings reality today, Beyond Meat couldn’t sustain investor exuberance.

What’s on the menu next?

Beyond Meat may be all sizzle and no steak: the Food Institute recently warned the company could face bankruptcy by 2027, when its sizable debt comes due. CEO Ethan Brown insists a turnaround is underway, but at this point, meme stocks like Beyond Meat might belong on Reddit rather than in your portfolio.—SY

Despite CEO and Founder Ethan Brown’s focus on positives—like launching a new Beyond Steak product, expanding presence to 2,000 Walmart stores, and implementing cost-cutting measures—he still faces a fundamental problem: consumer skepticism. Increasingly, meat alternatives are perceived as ultra-processed and less nutritious than real meat. Scientific studies have raised concerns about the high levels of sodium, additives, and industrial processing in many plant-based proteins, undercutting the halo that once fueled the category’s explosive growth.

Tune in to the Brew Markets podcast to hear what Brown had to say—and why I think the company may be living on borrowed time.—AB