Is a Short Squeeze Breaking Out in Beyond Meat Stock Now?

Beyond Meat (BYND) shares opened 20% higher on Tuesday as meme-stock enthusiasts continued piling into the plant-based meat alternatives company.

This retail-led surge pushed BYND’s relative strength index (RSI) into the late 70s, signaling overbought conditions that often precede a significant pullback. 

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Beyond Meat stock has pared back its intraday gains in recent hours, but remains up roughly 100% versus its year-to-date low. 

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What Triggered a Short Squeeze in BYND Shares Today?

BYND signed a massive distribution deal with Big Geyser for its newly launched Beyond Immerse protein water line and a nationwide rollout of breakfast sausages on April 21. 

Retailer traders are pinning their hopes on Beyond Immerse, believing it could help the company transform into a broader lifestyle brand. 

By entering the high-margin beverage sector, bulls hope Beyond Meat can diversify its way out of stagnant grocery aisle sales.

With short interest historically high, the positive news flow forced short-sellers to buy back shares to cover their positions, creating a feedback loop that sent BYND stock vertical this morning. 

Should You Chase the Momentum in Beyond Meat Stock?

Beyond Meat’s fundamentals still suggest its meteoric run in recent weeks is a dead cat bounce, not a sustainable recovery. 

The Nasdaq-listed firm is grappling with double-digit revenue declines, with a balance sheet that’s burdened with more than $400 million in long-term debt and negative shareholder equity. 

Plus, insiders have predominantly sold Beyond Meat shares in the trailing 12 months, indicating a lack of confidence in the company’s prospects. 

Investors should also note that despite an explosive move in April, BYND is still hovering around $1, which means the threat of a Nasdaq delisting also remains very real for this penny stock.

All in all, unless Beyond Immerse proves it can offset the structural decay in the core category, the stock remains a high-risk gamble for disciplined investors.   

Beyond Meat Remains Sell-Rated Among Wall Street Firms

Wall Street also remains bearish on Beyond Meat Inc for the next 12 months. 

The consensus rating on BYND shares sits at a “Moderate Sell” currently, with the mean price target of about $0.66, indicating potential downside of more than 40% from here. 

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On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.

 

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