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Here's How Beyond Meat (BYND) is Placed Ahead of Q2 Earnings

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Beyond Meat, Inc. (BYND - Free Report) is likely to report a decline in the bottom line when it releases second-quarter 2020 numbers on Aug 4, after the closing bell. The Zacks Consensus Estimate stands at a loss of 2 cents against earnings of a cent reported in the year-ago period. Notably, the consensus mark has remained stable in the past 30 days. In the last reported quarter, this renowned plant-based meat products company delivered a significant earnings surprise.

The Zacks Consensus Estimate for revenues is pegged at $97 million, indicating growth of 44.2% from the prior-year quarter’s reported figure.

Beyond Meat, Inc. Price and EPS Surprise

Key Factors to Note

In its first-quarter conference call, Beyond Meat pointed that it expects continued gains in the retail channel, courtesy of increased at-home consumption amid the pandemic. However, adverse impacts of the coronavirus-led social distancing on the foodservice business remain a concern. We note that the company, in its conference call, said that it expects short-term hurdles from COVID-19. These factors are likely to get reflected in the upcoming quarterly results.

Nonetheless, Beyond Meat has been making efforts, such as shifting foodservice production lines to retail, making value packs for instant retailers and undertaking an aggressive pricing strategy, to improve operations amid the pandemic. Also, the company has been committed to lowering discretionary expenditure. However, management expects a sequential decline in its second-quarter gross margin due to volume deleverage as well as repackaging costs stemming from shifting part of its foodservice inventory to retail SKUs.  

Apart from this, Beyond Meat has been benefiting from its focus on innovation. Toward this end, the company together with Starbucks launched Beyond Breakfast Sausage in Canada in early March. Beyond Meat’s launch of Beyond Beef in Mainland China (in April) with Starbucks was again a major milestone. The company expects favorable response for the new Beyond Beef items on Starbucks' menu across China. Additionally, the company’s digital developments to engage with consumers in China and bolster its brand name in the key market bode well. 

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict an earnings beat for Beyond Meat this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Beyond Meat currently has a Zacks Rank #3 and an Earnings ESP of 0.00%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks With Favorable Combinations

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season.

Nu Skin (NUS - Free Report) has an Earnings ESP of +6.35% and a Zacks Rank #1.

Flowers Foods (FLO - Free Report) has an Earnings ESP of +9.41% and a Zacks Rank #2.

Medifast (MED - Free Report) has an Earnings ESP of +2.53% and a Zacks Rank #2.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

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