Beyond Meat Inc., the maker of pea-based meat substitutes, has become the latest company to join the growing pantheon of meme stocks.

Trading volume in the company’s shares soared this week to unprecedented levels as the stock went on a wild ride — rising as much as 1,400% from its Oct. 16 closing low at one point — buoyed by a surge in social-media buzz and retail-investor interest that has drawn comparisons to the original 2021 meme-stock frenzy.

But beyond all the hype lies a disheartening reality: The business behind the stock has continued to struggle. According to its corporate filings and market data, Beyond Meat has continued to wrestle with declining sales and stiff competition from rival Impossible Foods. Meanwhile, Beyond Meat’s operations have continued to burn cash. And let us not forget — the El Segundo, Calif.-based company, which went public in 2019, last reported a quarterly profit in May 2020, and has yet to turn an annual profit.

The insane volatility seen in the company’s shares over the past week helps to underscore another important point: Investors’ gains from trading in meme stocks can vanish as quickly as they arrive.

After closing at a record low of 52 cents on Oct. 16, shares of Beyond Meat soared over the next four trading sessions. On Wednesday, the stock rocketed another 112.4% to an intraday high of $7.69. But soon after, it had erased all of those gains and more. The stock ultimately finished Wednesday’s session at $3.58, FactSet data showed. By the time the closing bell rang, Beyond Meat’s shares had erased more than 50% of the gains they had accrued since the rally began.

Shares have continued to decline since, with Beyond Meat finishing Friday at $2.19, after falling for a third straight session.

It is important to view meme stocks’ gains in context, said Derek Horstmeyer, a professor of finance at the Costello College of Business at George Mason University, who spoke with MarketWatch about the stock earlier this week. Even after its latest rally, Beyond Meat remains well below where it stood earlier this year. Even as the stock climbed to record one-day gain of 146.3% on Monday, it still closed that day 3.7% below where it started 2025. For the shares to return to their record closing high of $234.90 from July 26, 2019, they would need to climb by another 9,800% from their current level, according to FactSet data.

In the grand scheme of things, this week’s run is barely a blip on a longer-term chart of the stock’s performance.

Photo: FactSet, MarketWatch

While the excitement around meat substitutes had turned Beyond Meat into something of a prepandemic darling, the notion that its pea-protein supply chain could provide a moat that keeps competitors at bay has long since disappeared amid weak demand for fake meat.

Sure, so-called alternative meats have caught on with some consumers, but the market is still small compared with the broader meat industry. Last year, market-research company Circana reported that meat alternatives, including substitutes for chicken and beef, represented just 1% of total U.S. sales in the meat category.

Circana identified pockets of high adoption across the country, but also found that the percentage of households purchasing plant-based meats was declining. Pricing could be a factor, particularly at a time when many consumers are watching their wallets. Circana’s researchers also found that the price gap between more expensive alternative meat and traditional meat was $4.20, and noted that this might hinder purchases.

Wall Street is also skeptical. None of the eight analysts surveyed by FactSet are bullish on Beyond Meat’s stock. In fact, five of them are bearish, and three are neutral.

In the face of all this meme-stock hype, Mizuho Securities analyst John Baumgartner has turned even more downbeat on the company’s prospects. He said in a note to clients on Friday that industry surveys had indicated increasing interest in protein among consumers. This has helped to boost demand for meat despite rising prices. He cut his price target on Beyond Meat’s stock by 25%, to $1.50; that implies about 37% downside from current levels.

That isn’t to say that the stock hasn’t seen some positive catalysts lately. A deal to swap out some of its debt for shares has helped to clean up its balance sheet, while diluting existing shareholders. And a partnership with Walmart Inc. to sell Beyond Meat products in the retail giant’s stores could prove lucrative. On Friday, the companysurprised investors with preliminary third-quarter results, projecting revenue just above the FactSet consensus estimate.

It might seem counterintuitive, but the fact that so many professional investors are so bearish on the stock could ultimately work in its favor. The fact that short interest had recently reached a record high may have helped put the stock on meme-stock traders’ radars to begin with. Heavy short interest has become a common characteristic among meme stocks.

Photo: FactSet, MarketWatch

Similar to 2021, when shares of original meme stocks GameStop Corp. and AMC Entertainment Holdings Inc. skyrocketed, Beyond Meat has garnered plenty of attention on social media, helping to send the stock on its recent tear.

But while social-media buzz can certainly help a stock in the short term, professional investors would argue that it can’t succeed in the long term if the fundamentals of the business are deteriorating. Keeping an eye on the company’s top- and bottom-line numbers, as well as metrics like operating cash flow, can help investors differentiate the hype from reality.