On Monday, Beyond Meat Inc. (NASDAQ:BYND) shares edged lower by 2.33% after Barclays trimmed its price target to $80 from $90. The firm reiterated an underweight (sell) rating on the stock citing its disappointing Q3 revenue guidance as a concern.
The company lowered its fiscal Q3 revenue forecast to about $106 million from the previous guidance of $120-$140 million, versus the consensus analyst estimate of $132.88 million. Beyond Meat cited headwinds related to the Delta variant including decreased retail sales and delays in distribution expansion.
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As a result, Analyst Benjamin Theurer feels the company is tracking lower on the FY2021 revenue forecast, thus assuming a more cautious outlook.
Is Beyond Meat overvalued?
From an investment perspective, Beyond Meat shares trade at a steep price-sales ratio of 15.13 and a P/B ratio of 23.65, making the stock less attractive to value investors.
In addition, analysts expect its earnings per share to decline by 187% this year before falling at an average annual rate of 11.90% over the next five years.
Therefore, growth investors may also opt for alternatives in the market.
Technically, Beyond Meat shares seem to be trading within a descending channel formation in the intraday chart. As a result, the stock has plummeted to trade closer to the trendline support, pushing it towards oversold conditions.
Nonetheless, given the company’s weak revenue guidance, the current downward movement could push the stock deep into overbought conditions before triggering a rebound.
Therefore, investors could target extended declines at about $84.34, or lower at $73.56, while $104.85 and $114.94 are crucial resistance zones.
It may not be too late to sell
In summary, although Beyond Meat shares have recently plunged to trade closer to oversold conditions of the 14-day RSI, the stock still trades at steep valuation multiples whilst offering underwhelming growth prospects.
Therefore, given the current bearish pressure, it may not be too late to sell BYND shares.
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