Contrarian Play: Beyond Meat Is At An Inflection Point Beyond Meat is on the cusp of a substantial rebound, given the expanding availability and reviews of new products like Beyond Steak.

Beyond Meat (NASDAQ: BYND) deserves its spot among the most shorted stocks on Wall Street, but the story is played. The company's attempt to enter the mainstream market via fast food was a flop, but the recovery is underway. The recovery includes a focus on profitability, a renewed focus on quality and operations, and a shift toward the retail channels. Retail was always a foundational element of the company's strategy but not a primary focus until last year. Now, the company is making strides that include deepening penetration of markets and expanding product lines that point to sustainable growth.

The question is if the company can turn a profit. The outlook is for continued operating losses, but significant headway has been made. The last earnings report included a reduction in cash burn and net losses that should accelerate over the next few quarters. The company is expected to report in early August, which may provide a positive catalyst for share prices. The YOY comp will be ugly, down double-digits due to the lapping of sales related to failed fast-food launches, but sequential gains should be impressive.

The analysts have been raising their targets for revenue and earnings since the Q1 report and expect 21% in revenue growth. The company beat consensus by a wide margin last quarter and has made several strides since, so the bias is for outperformance. The real news will be the guidance. Execs reaffirmed guidance last quarter, so that is the least to expect. Based on the momentum in retail channels and strength in Europe, where consumer adoption is much easier, guidance may be increased.

Beyond Meat Expands Product Line Availability In Q2

Beyond Meat launched Beyond Steak late in 2022, which is getting good reviews. The word is that Beyond Steak cooks up crispy on the outside, is juicy, has a good mouthfeel, and tastes meaty. The product recently won the People Food Awards and is the #1 selling plant-based meat product in the US. The product was already in a handful of chains, including Kroger (NYSE: KR), Walmart (NYSE: WMT), Albertson's (NYSE: ACI), and Target (NYSE: TGT) and was recently added to Whole Foods (NASDAQ: AMZN), Publix (OTCMKTS: PUSH), Wegman's and a few others, which will drive top and bottom line strength.

Costco is also expanding its offering of Beyond Meat. The company will offer Beyond Burger nationwide and has begun the rollout of Beyond Sausage. Beyond Sausage recently underwent a reformulation to improve the spice mix and flavor and is also getting good reviews. This addition makes Beyond Sausage available in more than 15,000 retail locations nationwide.

The Market Is Too Bearish On Beyond Meat

The market wasn't too bearish on Beyond Meat when its shares were trading near $200, but it is now. With short interest running about 40%, institutions selling, and analysts reducing the stage is set for a short squeeze. The market is up 5% on the news and showing a bottom. If the Q2 results are even half-decent, it could shift the sell-side interest. Combining short-covering, institutional buying, and analysts' sentiment could fuel a sharp and sustained rally.

The market appears to be at the bottom. The bottom appears to be near $12, with a critical resistance point near $22. The stock should drift sideways within this range until the Q2 release, when it will make the next move. A move above the range would be bullish, and a move below might be bearish.