There was a time when Beyond Meat(NASDAQ: BYND) was hailed as a must-have investment due to the planet-saving nature of its products. Now the plant-based meat manufacturer is seemingly fighting for its own survival. Beyond Meat shares are down 10.6% as of 12:05 p.m. ET today, according to data from S&P Global Market Intelligence, in response to reports that the company is looking to restructure its debt.
That's the polite way of saying the company's management team is increasingly concerned that it won't be able to service or pay back the $1.4 billion worth of long-term obligations currently sitting on its balance sheet at this debt's current terms.
On the defensive
Beyond Meat has neither confirmed nor denied the report, for the record. Coming from the Wall Street Journal's citing of "people familiar with the matter," however, it's not as if the possibility lacks credibility.
Bolstering the plausibility of the claim is the company's sheer continued losses. Beyond Meat lost another $54.4 million during the quarter ending in March on revenue of $49.4 million, which was down 16% year over year.
The quarter kept the company in the red, an extended top-line contraction that's been underway since the latter half of 2022, when the world began deciding plant-based vegan meat wasn't quite what it wanted. McDonald'sdiscontinued its Beyond Meat burgers in the middle of that year, with Carl's Jr. and Del Taco following suit in the meantime. Many grocery stores are also scaling back the breadth and depth of their Beyond Meat lineups.
The underlying prompt? There's just not enough consumer interest right now to justify prioritizing plant-based meat over better-selling items.
Beyond Meat stock is past its expiration date
That's not to suggest vegan meat has no future. There's at least a small following of loyal customers that like the product and don't mind its price.
From a business-venture perspective, though, Beyond Meat's math isn't sustainable, even if the Wall Street Journal's report regarding a debt restructuring isn't accurate. The company spent too much money in its infancy and is now stuck with more debt burden than can be supported by its sales. Interested investors would be better served by looking for other names with a more promising future.
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James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Beyond Meat. The Motley Fool has a disclosure policy.
