Beyond Meat(NASDAQ: BYND) stock skyrocketed 73.5% in Tuesday's after-hours trading, following the plant-based meat substitute maker's release of its fourth-quarter 2023 report. This sharp rise is largely attributable to the quarter's revenue exceeding Wall Street's consensus estimate, and the company's plans to "steeply reduce" costs in 2024, in the words of CEO Ethan Brown.

These factors would not usually propel a stock up a whopping 74%, but price movements tend to be magnified for stocks with very high short interest, such as Beyond Meat. As of Jan. 31, about 36% of the company's shares outstanding were sold short. Briefly, short-sellers are betting that a stock's price will decline, and when better-than-expected news comes out, some of them will close out their short positions by buying shares.

Beyond Meat's key quarterly numbers

Data source: Beyond Meat. GAAP = generally accepted accounting principles. *Calculations by author, except for revenue change, which Beyond Meat provided.

GAAP net loss includes noncash charges totaling $95.6 million, the company said in the earnings release. The release didn't provide results adjusted for one-time items. But using the data it provided and the number of shares outstanding, we can fairly confidently calculate the adjusted bottom line. This metric comes out to an adjusted loss of $0.92 per share.

Wall Street was looking for an adjusted loss of $0.88 per share on revenue of $66.7 million. So, Beyond Meat missed the bottom-line estimate but surpassed the top-line one.

For full year 2023, the company used cash of $107.8 million running its operation, an improvement over the year-ago period, when it used cash of $320.2 million. It ended the year with cash and cash equivalents of $205.9 million and total outstanding debt of $1.1 billion.

Revenue breakdown

Data source: Beyond Meat. YOY = year over year. Revenue doesn't exactly add up to geographic and overall totals due to rounding.

The decrease in total revenue was driven by a nearly 15% drop in average net revenue per pound, partially offset by an 8% increase in volume of products sold. The higher volumes came from the international business.

The company attributed the declines in the U.S. business "primarily" to weak plant-based meat category demand.

What the CEO had to say

Here's most of what CEO Ethan Brown had to say in the earnings release:

In 2023, Beyond Meat undertook extensive initiatives to reset the business toward sustainable operations and, ultimately, profitable growth. Much of this reset is now coming into view.

Our 2024 plan includes taking steps to steeply reduce operating expense and cash use; pricing actions and the right-sizing of our production footprint, both in support of margin expansion; a years-in-the-making core platform renovation in Beyond IV that delivers superior health benefits and taste; and, following the announcement and initiation of our Global Operations Review, taking certain non-cash charges pertaining to inventory and assets that are no longer consistent with our path to profitability.

Q1 2024 and full-year 2024 guidance

For the first quarter of 2024, management guided for revenue of $70 million to $75 million. This would equate to a decline of 24% to 19% year over year. Going into the release, Wall Street had been modeling for Q1 revenue of $88.6 million, so Beyond Meat's outlook falls considerably short of this expectation.

For full-year 2024, the company guided for:

• Revenue of $315 million to $345 million. This would equate to an annual decline of 8% to flat.
• Gross margin in the mid-to-high-teens range for the year, but higher in the second half of the year relative to the first half.

Going into the release, Wall Street had been expecting full-year 2024 revenue of $343.8 million, so the company's outlook (at the midpoint of the range) missed this estimate.

For context, in 2023, the company's gross margin was negative 24.1%. However, that metric includes the bulk of the non-cash charges previously mentioned, as these charges are in cost of goods sold. Adjusted for these charges -- totaling $78 million -- 2023's gross margin was negative 1.3%, so just about breakeven.

A shrinking business

Can the company go from an adjusted gross margin of roughly breakeven in 2023 to the mid-to-high teens in 2024? It's possible if it cuts enough costs. That said, I'll reiterate what I wrote last quarter:

Beyond Meat is a steadily shrinking business. ... Cost-cutting measures can only be taken so far. The only way to have a profitable business over the long term is to profitably grow revenue.

The company's outlook for full year 2024 is more optimistic than that of the first quarter. However, investors shouldn't put much stock (pardon the pun) in the full-year outlook because it's difficult for any management team to guide so far out. In 2023, for instance, Beyond Meat lowered its full-year guidance three times as the year progressed.

Investors should keep an eye on the company's liquidity situation. In 2023, it used cash of $107.8 million running its operations. At that operating cash-burn rate alone (meaning excluding any cash used for growth investments or debt financing), its cash of $205.9 million would last less than two years.

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BA McKenna has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Beyond Meat. The Motley Fool has a disclosure policy.