Symbotic stock analysis. Ticker: SYM.
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Symbotic, ticker symbol SYM, uses robots to automate warehouse supply chains. The stock jumped 50% after earnings last week and it’s up 500% since it came to the market via a SPAC last year.
At the current share price, the company has a valuation of 28 billion dollars. It’s got 500 million of cash and investments and no debt so the enterprise value is 27.3 billion.
Symbotic’s technology sounds futuristic and it’s revenue growth is equally impressive. Revenue in the latest quarter surged by 78% to 312 million taking the twelve month total to over 1 billion and that’s ten times more than it produced in 2019.
However, the company is not profitable. Net income over the last 12 months is negative 216 million. With 149 million of stock based compensation free cash flow, however, is positive at 107 million.
Symbotic’s autonomous robots can travel up to 25 miles per hour and are controlled by AI. This addresses 3 fundamental problems for companies.
1. It reduces the need for warehouse workers such as forklift drivers. 3
2. It helps companies more quickly adapt their warehousing strategies
and 3. It better suits the huge increase in individual items of stock known as SKUs.
This is a huge market and Symbotic already has relationships with large customers such as Walmart, Albertsons, Target and Giant Tiger. Plus, a joint venture with Softbank means the company can begin to adapt the technology for smaller customers as well.
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Join 9000+ investors: https://www.overlookedalpha.com
Symbotic, ticker symbol SYM, uses robots to automate warehouse supply chains. The stock jumped 50% after earnings last week and it’s up 500% since it came to the market via a SPAC last year.
At the current share price, the company has a valuation of 28 billion dollars. It’s got 500 million of cash and investments and no debt so the enterprise value is 27.3 billion.
Symbotic’s technology sounds futuristic and it’s revenue growth is equally impressive. Revenue in the latest quarter surged by 78% to 312 million taking the twelve month total to over 1 billion and that’s ten times more than it produced in 2019.
However, the company is not profitable. Net income over the last 12 months is negative 216 million. With 149 million of stock based compensation free cash flow, however, is positive at 107 million.
Symbotic’s autonomous robots can travel up to 25 miles per hour and are controlled by AI. This addresses 3 fundamental problems for companies.
1. It reduces the need for warehouse workers such as forklift drivers. 3
2. It helps companies more quickly adapt their warehousing strategies
and 3. It better suits the huge increase in individual items of stock known as SKUs.
This is a huge market and Symbotic already has relationships with large customers such as Walmart, Albertsons, Target and Giant Tiger. Plus, a joint venture with Softbank means the company can begin to adapt the technology for smaller customers as well.
#overlookedalpha #stocks #investing #stockstowatch
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NewsTranscript
00:00 This is one of the best performing stocks on the market right now.
00:03 Symbotic ticker symbol SYM uses robots to automate warehouse supply chains.
00:09 The stock jumped 50% after earnings last week and its up 500% since it came to the market
00:15 via a SPAC last year. At the current share price the company has a valuation of $28 billion.
00:20 It's got $500 million of cash and investments and no debt so the enterprise value is $27.3 billion.
00:28 Symbotic's technology sounds futuristic and its revenue growth is equally impressive.
00:33 Revenue in the latest quarter surged by 78% to $312 million taking the 12 month total to
00:39 over $1 billion and that's 10 times more than it produced in 2019. However the company is not
00:45 profitable. Net income over the last 12 months is -$216 million with $149 million of stock based
00:52 compensation. Free cash flow however is positive at $107 million. Symbotic's autonomous robots can
00:59 travel up to 25 miles per hour and are controlled by AI. This technology addresses three fundamental
01:06 problems for companies. One, it reduces the need for warehouse workers such as forklift drivers
01:11 thus saving on labor costs. Two, it helps companies more quickly adapt their warehousing strategies
01:17 and three, it better suits the huge increase in individual items of stock known as SKUs.
01:23 This is a huge market and Symbotic already has relationships with large customers such as Walmart,
01:28 Albertsons, Target and Giant Tiger. Plus a joint venture with Softbank means the company can begin
01:34 to adapt the technology for smaller customers as well. All that said this is now an extremely
01:40 expensive stock trading at 27 times revenue and a high short interest indicates that not everyone
01:46 is so bullish on the business. Bears claim that Symbotic's technology is not as advanced as the
01:51 company makes out and they cite a number of competitors such as Ocado, Dymatic, AutoStore
01:58 and Kiva Systems which was bought by Amazon. Company insiders have also been huge sellers
02:03 of the stock and at much lower prices. But one of the biggest problems for Symbotic is the company's
02:08 low gross margins, right now only 16%. Let's assume a scenario where the company can grow
02:13 revenue 50% next year, 45% in year 2, 40% in year 3, 35% in year 4 and 30% in year 5. That would put
02:23 revenues at 5.5 billion in 5 years time and if Symbotic can get to 15% net income margins it
02:30 would be producing 820 million of net income. A 35 times multiple would then give the company a
02:36 valuation of 28.7 billion dollars but that's less than 1% above the current market cap. So Symbotic
02:44 stock looks pretty overvalued right now. But that said I wouldn't want to bet against such a fast
02:49 growing business so I give the stock a neutral rating. But these are my personal opinions not
02:54 financial advice and I've got no position in the stock. For more detailed investing ideas
02:59 make sure to visit our website overlookedalpha.com