Beyond Meat slips ahead of earnings as analysts wonder if shares are overstretched (BYND)

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Beyond Meat’s second-quarter earnings are due after market close Monday — its second report as a public company.
Shares fell by as much as 14% early Monday before paring losses slightly by mid-morning.
The stock had spiked 840% since Beyond Meat’s initial public offering, through Friday.
No analysts on Wall Street have a "buy" rating on Beyond Meat’s stock, and have repeatedly questioned whether shares are overvalued.
Watch Beyond Meat trade live on Markets Insider.

Investor expectations for Beyond Meat‘s earnings seem to be cooling.

Shares of the plant-based meat alternative company fell as much as 14% early Monday ahead of the company’s second-quarter earnings release, which will be its second as a public company. That decline pared slightly by mid-morning.

The loss comes after Beyond’s 33% increase last week, which some saw fueled by positive earnings hype. Prior to Monday’s decline, the stock was up 840% since its initial public offering.

Analysts that cover Beyond have long had expectations of the stock that have lagged its market performance. Of the nine analysts that cover the stock, none rate shares "buy." Meanwhile, eight of them have assigned Beyond the equivalent of "hold," while one analyst says shares are a "sell."

In addition, no analysts have a price target that’s more than $125. That means that shares are now trading roughly 80% higher than where analysts think it should. For context, the stock broke above $200 per share for the first time last week before closing at $235 a share Friday.

The discrepancy between the stock’s value and where Wall Street thinks it should has all eyes trained on Beyond’s earnings release, which is due after the market close on Monday.

The company’s first quarter earnings beat sent shares soaring 20%. Investors are hoping that history will repeat itself, while analysts are looking for signs that Beyond could soon turn a profit.

Here’s what analysts surveyed by Bloomberg expect:

Earnings per share: loss of $0.08 per share expected
Revenue: $50.7 million expected

Analysts forecast that Beyond will trim its operating losses from the first quarter to the second. The company lost $5.29 million in operating profit in the first quarter, and analysts expect that the company will lose only $3.8 million in the second quarter. That’s in line with the company’s own estimate that it could soon be profitable.

The company has made strides in the last quarter, landing new deals with fast-food restaurants such as Dunkin’, and Blue Apron, and announcing that it is developing a plant-based bacon alternative.

CEO Ethan Brown said that it has been fascinating "watching a brand morph into a movement."

"That’s not what we’re doing, that’s what the world is doing," Brown said in an interview with Business Insider’s Kate Taylor.

Demand for plant-based alternatives to meat and dairy products have soared, contributing to Beyond’s blockbuster performance since its May IPO. The market for plant-based meat could reach $140 billion in the next decade, according to an estimate from Barclays. That means that the current $14 billion market could grow up to 900%.

Beyond Meat has enjoyed what may be a first-to-market advantage. It is not the only company that makes plant-based burgers and more, but it is the first one to publicly list on the market.

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