These 2 Growth Stocks Are Down 80% From Record Highs
May 25 2022 - 5:16AM
Finscreener.org
Growth stocks such as
Lyft (NASDAQ: LYFT) and Beyond Meat
(NASDAQ:
BYND) have burnt massive wealth for investors in the
last year. The two stocks went public in 2019 and have since
disappointed market participants due to their less-than-impressive
performance.
Shares of Lyft were listed on the
Nasdaq at the start of 2019 at $72. The LYFT stock touched a high
of $80 and is now trading at $16.72 per share. Similarly, the IPO
price for Beyond Meat stood at $25 per share. The BYND stock surged
to a record high of $235 in July 2019 and is currently trading at
$23.
Let’s see if these beaten-down
growth stocks can stage a comeback by the end of 2022.
Lyft
Ride-sharing company Lyft
announced its Q1 results earlier this month and reported revenue of
$876 million which was an increase of 44% year over year.
Comparatively, its adjusted earnings stood at $0.07 per share.
While Lyft surpassed estimates in Q1, it forecast revenue between
$950 million and $1 billion in the June quarter which was below
consensus forecasts of $1.02 billion.
LYFT stock fell by more than 7%
yesterday after the company disclosed it will trim costs and freeze
hiring decisions due to an uncertain economy.
Investors remain worried about
Lyft’s long-term potential as it continues to report an operating
loss. In Q1, its operating loss stood at $200 million while free
cash flow was a negative $167 million. Lyft also emphasized it
would increase incentive spending on drivers which will negatively
impact the bottom line.
Alternatively, Lyft is valued at
less than 1.5x forward sales given its market cap stands at $5.8
billion, and the company is forecast to increase sales
by 32% to $4.23 billion in 2022. Its
adjusted earnings per share are estimated at $0.32 compared to a
loss of $0.25 per share in 2021.
Additionally, Lyft ended Q1 with
a cash balance of $2.2 billion which provides it with enough runway
to improve profit margins going forward.
Beyond Meat
Valued at $1.45 billion by market
cap, Beyond Meat has been
among the worst
performers on the Nasdaq
in the past year. In the March quarter, Beyond Meat reported
revenue of $109.5 million, an increase of just 1.2% year over year.
Its gross margins fell to 0.2% compared to 30.2% in the year-ago
quarter, widening its losses to $100.5 million or $1.58 per
share.
Analysts forecast the company to
report revenue of $112.4 million with a loss per share of $0.97 in
the quarter.
Beyond Meat confirmed its gross
margin issues were temporary as it continues to spend heavily on
strategic launches and marketing. The company forecasts sales
between $560 million and $620 million in 2022, valuing BYND stock
at 2.5 times forward sales. It also represents an increase of 27%
at the midpoint of its guidance.
Despite its tepid Q1 results,
Beyond Meat maintained its full-year forecast but it did not
provide any estimates for the bottom line making investors nervous.
Analysts expect its loss per share to almost double to $4.5 in
2022, compared to $2.87 in 2021.
Beyond Meat claimed it is focused
on improving its supply chain and increasing production to meet
rising demand. In Q1, Beyond MeatU+02019s sales growth was
unimpressive due to lower prices, as the company’s product volume
was up 12.4% and the price per pound fell by 10%.
Beyond Meat aims to reduce the
price difference between original meat products and its suite of
plant-based substitutes. But it will have to achieve its goal
without reducing profit margins in order for the business to be
sustainable.
Beyond Meat (NASDAQ:BYND)
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