Another year, another meme stock has come a-knocking. This time, it is Beyond Meat (NASDAQ:BYND) that is riding the rollercoaster of retail investor sentiment.
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The trading bonanza kicked off a few days ago when the investor known by the handle Capybara Stocks (whose real name is Dimitri Semenikhin) posted on Reddit about a $3 million position he had taken in BYND along with his investment thesis.
That spark turned into a full-blown buying spree, sending BYND shares soaring more than 1,000% in just a few days. Although the stock has since cooled from its highs, it remains up by ~240% over the past week.
But while some are cheering the comeback, not everyone is convinced the rally has staying power. Harrison Schwartz, who has tracked BYND for years, has some advice for would-be buyers: “Remain very bearish.”
“While meme dynamics could drive temporary spikes, the company’s long-term prospects remain bleak,” explains the 5-star investor.
The fundamentals, emphasizes Schwartz, are quite weak, with negative cash flow, slowing revenues, and an insufficient customer base. Though a recent debt-for-equity deal lessens the risk of an immediate bankruptcy, the company has been struggling to build out a lasting and loyal clientele.
That’s the real issue, further details Schwartz, as “most people do not like ‘fake meat.’” That’s akin to a death sentence for the company, and the investor cites one study that found that only 25% of consumers surveyed had a positive view of the brand.
These problems are compounded by studies questioning the health benefits, its pricey sticker price, and the growing “carnivore and MAHA influencer community” that is pushing back on plant-based proteins.
“Unless Beyond Meat could win in any category (taste, cost, or health), I see no value in its products, and therefore no value in the company,” adds Schwartz.
“The recent rally is likely a short squeeze and ‘dead cat bounce’ rather than a sign of lasting recovery,” sums up Schwartz, who rates BYND shares a Strong Sell. (To watch Harrison Schwartz’s track record, click here)
Wall Street also seems content to stay away. With 3 Holds and 5 Sells – and not a single Buy – BYND holds a Moderate Sell consensus rating. Its 12-month average price target of $2.08 points to a downside in the mid-single digits. (See BYND stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.