Should I sell Beyond Meat shares after Q3 results?

Beyond Meat, Inc (NASDAQ: BYND) shares have weakened more than 14% last trading week after the company reported weak third-quarter results. Total revenue has increased above the expectations, but the net loss in the third quarter was $54.8 million or -$0.87 per share.

Net loss in Q3 was $54.8 million

Beyond Meat is a Los Angeles-based producer of plant-based meat substitutes with products designed to emulate chicken, beef, and pork sausage. Beyond Meat reported its third-quarter results on Wednesday; total revenue has increased by 12.7% Y/Y to $106.43 million, while the GAAP EPS was -$0.87 (misses by $0.54).

Growth in net revenues was primarily driven by a 143% year-over-year increase in sales to international customers, while the net revenues in the U.S declined 14% in the third quarter of 2021.

Adjusted EBITDA was a loss of $36.8 million or negative 34.5% of net revenues compared with a loss of $2.2 million or negative 1.5% of net revenues in the second quarter.

The decrease in adjusted gross margin was primarily driven by increased transportation costs, amortization, and inventory write-offs, but the company will continue to have these issues in the upcoming months. Phil Hardin, CFO of Beyond Meat, added:

Beyond Meat issued weak guidance for the next fiscal quarter and reported that it expects revenue to be just $85 million to $110 million.

This is well below analysts' estimates, and Bank of America expressed concern that U.S. demand for plant-based protein products appears to be slowing.

Beyond Meat shares remain under pressure, the company's EBITDA is negative, the book value per share is less than $4, while J.P.Morgan expects that investors will stay away from food companies during the next several months.

Bears control the price

Beyond Meat stock price has fallen more than 60% after reaching the highest level in 2021 of $221 on January 26, and for now, bears remain in control of the price action.

Beyond Meat shares continue to trade near a 20-month low, and if the price falls again below $80 support, the next target could be $70.

On the other side, if the price jumps above $120 resistance in the upcoming weeks, it would signal trading shares, and the next target could be at $130 or even above.

Summary

Beyond Meat shares have weakened more than 14% last trading week after the company reported weak third-quarter results. Bank of America expressed concern that U.S. demand for plant-based protein products appears to be slowing, and probably it is not the best moment to have Beyond Meat shares in your portfolio.