Beyond Meat Stock Surges on Select Financial Results Ahead of Earnings
Nov 2, 2023
Beyond Meat Inc. (BYND) is set to report third-quarter fiscal results on Wednesday, Nov. 8. The company will hold a conference call the same day shortly after releasing its financial results.
Investors expect to see adjusted earnings per share (EPS) of -$0.85 on an adjusted basis and -$0.82 on a GAAP basis. Those estimates have moved lower by 1.42% and 2.47% over the last four weeks, according to Bloomberg data.
Beyond Meat had a horrible October, falling 37.94%—its largest monthly percentage decline since September 2022. A broader market decline didn’t help its performance, but the losses were north of the 2.2% decline in the S&P 500 and 2.08% decline in the Nasdaq 100.
The company surprised investors on Thursday by releasing select third-quarter financial results and revised guidance for its full-year 2023 outlook, as well as spending reduction plans.
According to a press release from Beyond Meat, the company is targeting a 19% reduction in non-production headcount as anticipated growth failed to materialize.
“We anticipated a modest return to growth in the third quarter of 2023, that did not occur, reflecting further sector-specific and consumer headwinds," the company's CEO, Ethan Brown, stated. "Even as we implement measures to address those headwinds that are within our sphere of influence, we intend to pursue a further, sizable reduction of operating expenses to improve our cost structure.”
Traders were pleased, however, with the announcement and the stock price on Thursday rose nearly 20% in its best one-day percentage gain since June. The updated fiscal guidance puts net revenue at $75 million for Q3, which is below the consensus estimate from analysts. For now, investors appear pleased with the plans to reduce and control costs.
Beyond Meat is trading with a beefy 71.7 implied volatility rank (IVR), offering traders some juicy premium to trade options around its earnings.
The November 10 option expiry, which captures the November 8 earnings, puts the expected move at +/- 1.11, a rather significant move for a $7 stock.
A short strangle or iron condor is a neutral delta strategy that could benefit from a collapse in volatility. That may make sense, given that the selected results released today take away some of the uncertainty or threat of big surprises next week when BYND reports.
Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. @fxwestwater
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