Beyond Meat (BYND), the plant-based meat alternative company, released a weak earnings report on Thursday, and now the stock is down 33% year-to-date.

Does this give bargain-hungry traders an opportunity to dig in, or will buying now give investors indigestion later? (And, what about those bonds?)

Let’s talk about earnings first. The poor results were partly due to new competition and the fact that fewer American households than expected started eating vegetarian alternatives to meat. Beyond Meat’s revenue of $147 million was down slightly year-over-year and losses were around $97 million. The gross profit margin was -4.2%.

As more competitors come in and Beyond’s losses and debt mount, the shares will likely trade lower. But Beyond got off to a good start. By striking deals with fast-food companies such as McDonald’s (MCD), Taco Bell (YUM), Restaurant Brands International’s Tim Hortons (QSR), and PepsiCo (PEP), Beyond Meat had an early critical advantage. Yet those opportunities have mostly fallen flat. Dunkin’ has dropped a plant-based offering, while Tim Hortons now offers Impossible sausages from Beyond’s strong competitor, Impossible Foods. McDonald’s has reportedly concluded its trial of the McPlant Burger in countries after disappointing results as international trials are underway.

Beyond Meat has done a great job diversifying its products, but there is competition in most categories. Beyond once dominated the plant-based meats section at Whole Foods (AMZN), but now it’s more like the yogurt section with offerings from many manufacturers.

The analyst community has already deemed the situation irretrievable. No company has a “Buy” for Beyond, and 15 have “Hold” ratings, while six have “Sell” or “Underperform” ratings. The average price target is $25. Perhaps the silver lining for the stock is that no one remains bearish. But, since Beyond is bleeding money and has an already rich valuation of 5x company value/sales, there’s little room for a contrarian to thrive.

Without a doubt, Beyond Meat’s products benefit climate and animal welfare initiatives. Plant-based products are likely to become more mainstream, especially in a food chain stressed by more extreme weather conditions. Beyond’s offerings are “eco-friendly” compared to meat and dairy, though shareholder benefits are much more dubious.

Since its IPO in 2019, BYND has taken on significant debt of $1.1 billion to fund losses. Beyond’s zero-coupon convertible bonds due 2027 trade at 39¢ on the dollar for a yield to maturity of over 21%. Investors who believe in Beyond Meat’s financial survival over the next five years should consider these bonds rather than common stock. If redeemed at par, the bonds will yield more than 150% by 2027. To conserve capital, the company plans layoffs and other cost-cutting measures to reduce operating expenses, but the company may still spend most of its cash over the next six years. eight quarters without a significant recovery in activity. Since the bond market is closed for Beyond Meat for the foreseeable future, the company will likely issue dilutive stock to cover future losses and shore up its balance sheet.

A sizable 37.50% short interest in BYND shares has the potential to keep the stock higher for some time, especially in a market that has become more speculative. Still, the stock is a sell on any strength. Ultimately, dilution and continued losses make stocks uninvestable and beyond toast.

(PEP is a stake in the Action Alerts PLUS members club. Want to be alerted before AAP buys or sells stocks? Learn more now.)

Receive an email alert each time I write an article for Real Money. Click “+Follow” next to my signature for this article.