By Senad Karaahmetovic
Shares of Beyond Meat (NASDAQ:BYND) are down roughly 4% today after BTIG analyst Peter Saleh said the McPlant test results indicate the product won’t be on National Menu in the second half of the year.
McPlant performed in a disappointing manner at McDonald’s (NYSE:MCD), said Saleh, and cut financial estimates for BYND. Sales came in "at or below the low-end of sales projections."
“Given this development, coupled with slowing category sales and declining selling price, we believe management's sales guidance and our initial estimates were just too high. Contrary to consensus though, we don't believe Beyond's capital position is as dire as sentiment suggests,” Saleh told clients in a note.
The analyst expects BYND will “burn a lot of cash,” but he doesn’t see the company having a need to raise additional funding this year.
“Our current estimates place this year's cash burn around $440MM, ending the year with ~$295MM in cash, with a downside scenario burning closer to $555MM and ending the year with just under $180MM in cash. Regardless, we estimate the company will end the year with a sufficient cash balance, so long as gross margin meaningfully improves,” the analyst concluded.