Beyond Meat: Top 3 things for investors to watch in 2024

Beyond Meat (BYND) has had a mixed year in 2023, with shares of the company down 25% year-to-date. Yahoo Finance Executive Editor Brian Sozzi got a chance to sit down with Founder & CEO of Beyond Meat, Ethan Brown to discuss the company and the challenges they faced. With 2024 ahead and a new chance to turn things around, Yahoo Finance Anchors Brad Smith and Brian Sozzi break down Beyond Meat's performance and discuss company outlook ahead of the new year.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Video Transcript

[AUDIO LOGO]

BRIAN SOZZI: In our latest episode of our new show Lead This Way, I got a chance to sit down with Beyond Meat founder and CEO Ethan Brown, to discuss how he's staying centered throughout the stock's steep drop off.

We're trying to do something that is not going to happen overnight, that has fits and starts. We're going to make this thing into the long-term success that we've been after. I would be dishonest if I said, it hasn't been difficult. There have been challenges. But there's been more reward than there have been challenges. There's been more opportunity to impact change than not.

BRIAN SOZZI: And, Brad, as part of this interview, I got to spend really the whole day with Ethan and his team in their new headquarters out in El Segundo, which is interesting right across from the street from Mattel's headquarters. But nonetheless, I've known Ethan for about five years, and I didn't get the sense that he was deterred by his mission to change the meat industry.

Of course, there's Ethan Brown right there on the screen. I think he remains laser-focused on bringing more innovative products to market. Remains laser-focused on getting more deals with the likes of McDonald's, some of the fast food players. And then laser-focused on getting the prices of his products down to a point where consumers don't have to necessarily grab for a cheaper alternative in meat.

To me, he seems like the same guy I met him. Now, is he happy with how the stock price has fared? Well, of course, not. This is a company that burst onto the radar screen May 5, 2019, with its IPO over at the NASDAQ. The IPO price was $25 the first trade. For Beyond Meat was 46. And then it surged to $65.75 a share by the close of trading. That's 163% gain.

So the stock has fallen way back. The results have not been where they should be. Consumers have questioned the health of Beyond Meat products. And then, of course, question the health of Impossible Foods. It's not just the Beyond Meat thing.

So I think for next year. Now that they have reset the cost structure, they have had two rounds of pretty big sizable layoffs. They have reset the cost structure. They've brought the price points down, these products. Is 2024 the year where the top line stabilizes, the bottom lines, the cost structure is in better shape, and then you finally start to get some better results from Beyond Meat. I think that's what a lot of bulls in this story are hoping for.

BRAD SMITH: Yeah, it comes back to a few things. And you mentioned, many of them kind of linking about the consumer with that perhaps appetite needs to change more notably. I mean, you still have a consumer environment. One of the things that's going to be an overhang for Beyond Meat is just how much people are actually eating.

We've talked about, of course, the company of the year this year for Yahoo Finance, Novo Nordisk. And you think about some of the underlying stories that have really prompted so much attention towards the health care space. It's really been the weight loss drugs at this point in time.

And so if you have less of a portion of people that are eating out there or people who are eating far less, that impacts directly a company like Beyond Meat and the potential orders that they could see both on the wholesale side, as well as into some of the restaurants that they also have partnerships with.

So two-pronged business, where you think about the retail, but also on the food service side, and then additionally, the scaling that they've had to do over that point in time too. This is a company that used to have so much of their production in different factories or different operational facilities that they did not own.

They decided to pivot. They decided to make sure that they could grow those out themselves, break ground, and be able to hold on to more of that production capacity and make it something that was just their own entity, where they weren't leasing space, but they own the space. And so that was a strategic decision.

This is also just a story I think of needing cash and having to tap the market for more of that. And that's where you've seen some of the share price impacts most notably over that long-term chart is because they had to go back to the market and do at the market equity offerings, as well, and so the listing of additional shares. That's what impacted them back in 2019, that continued to impact them later on because of the dilution that took place

BRIAN SOZZI: Yeah. And I'll just add. I think Ethan has been very consistent. We have talked in the past that he needs and he wants to get the price points of these products down, and he has to continue to do that. And in order to do that, you just have to make more of them because the demand is there.

So he has to get those price points down, where this becomes more of a mass market option, where that family of four that remains-- that is on a very tight budget reaches for Beyond Meat products, whether it's meatballs, sausage, or hamburgers, whatever it is, reach for this instead of a four or six-pack of traditional meat products.

BRAD SMITH: All right. Well, we'll see. And great conversation there with Ethan.