Beyond Meat (NASDAQ: BYND) stock jumped over 30% to a six-month high on Wednesday. The surge came as the plant-based meat producer announced strategic initiatives aimed at bolstering its margins, including price hikes and significant cost cuts. This initiative has triggered a squeeze on its heavily shorted shares.
Shares of Beyond Meat saw a significant short interest of about 37.6% of the free float of the company, equivalent to shares valued at $172.6 million, as of Monday, according to data from analytics firm Ortex. Bearish investors faced paper losses totaling $93 million since the closing of Tuesday.
Beyond Meat also emerged as one of the most shorted U.S. stocks, trailing closely behind COVID-19 vaccine manufacturer Novavax (NASDAQ: NVAX), according to a recent report from S&P Global Market Intelligence.
The company, known for supplying to major fast-food chains such as McDonald’s (NYSE: MCD) and Yum Brands, has been grappling with a substantial decline in market value, losing nearly 70% since its much-anticipated IPO in 2019. This decline coincides with challenging market sentiment surrounding plant-based meat, worsened by higher prices due to sticky inflation.
Beyond Meat Q4 Performance
In the fourth quarter, Beyond Meat reported a 7.8% decrease in net revenue to $73.7 million, beating analysts’ expectations of $66.7 million.
The company also revealed plans to reduce operating costs to restore margins. These margins were impacted by price cuts aimed at appealing to cost-conscious American consumers.
Beyond Meat anticipates gross margins for 2024 to range in the mid-to high-teens percentage, a significant improvement from the negative 24.1% reported in 2023.
Analysts at TD Cowen noted that the company’s strategic shift towards raising prices aligns with its need to target a more specific consumer base for sustainable success, rather than pursuing widespread affordability through continual price cuts.
Beyond Meat (NASDAQ: BYND) Stock Performance
BYND stock surged 30.72% to close at $9.83 on Wednesday. The traders had exchanged hands with 44,504,611 (44.50 million) shares compared to the average daily trading volume of 3.14 million.
