Symbotic SYM is an American robotics warehouse automation company based in Wilmington, Massachusetts. Founded in 2014, the company develops and deploys AI-powered robotic systems that automate warehouse operations, aiming to improve efficiency, accuracy, and safety.
With tailwinds from AI, automation, e-commerce, and other bleeding edge tech, Symbotic is a company that is positioned for huge gains over the next few years.
Because of the excitement surrounding the company, it trades at an uber-premium valuation, increasing potential downside in the near-term. However, for those investors willing to hold through high volatility swings, Symbotic may be the next speculative stock to add to your portfolio.
Symbotic reports earnings on Monday, after the market close, which will provide investors with new data on the business’ progression.
Leading Innovations
Symbotic has been developing one of the most innovative and well positioned new products in the market, combining a litany of new technologies.
Symbotic’s core product is its Symbotic System, which consists of:
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Autonomous mobile robots (AMRs): These robots navigate the warehouse using cameras and sensors, retrieving, and storing goods from shelves.
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Software platform: This software controls the robots, optimizes warehouse layout and inventory management, and integrates with existing warehouse systems.
The Symbotic System is designed to be modular and scalable, so it can be adapted to a wide range of warehouses and needs.
The benefits of using Symbotic’s system include:
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Increased efficiency: The robots can work 24/7, which can significantly increase the throughput of a warehouse.
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Improved accuracy: The robots use computer vision to ensure that they pick and store the correct items.
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Reduced labor costs: Symbotic’s system can reduce the need for human labor in the warehouse.
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Enhanced safety: The robots are designed to operate safely alongside humans.
Symbotic has partnered with several major retailers and logistics companies, including Walmart WMT, FedEx FDX and Target TGT. The company has also raised over $1 billion in funding from investors such as SoftBank Vision Fund and Temasek Holdings.
Considering the massive scale of operations at companies like Walmart and Target, as well as the exploding e-commerce industry born from companies like Shopify SHOP and Amazon AMZN, the sky is the limit at SYM.
In June 2022, Symbotic went public through a special purpose acquisition company (SPAC).
Overall, Symbotic is a leading player in the growing market for warehouse automation. The company’s technology has the potential to revolutionize the way warehouses operate and create significant value for its customers.
SYM stock has made some impressive gains since it went public in 2022 but has stalled out over the last six months or so.
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Earnings Estimates
Symbotic is one of these startup companies with exponential growth, putting everything toward building the business as fast as possible. Because of this even though it has 50% YoY sales growth projections, EPS are still net negative. However, EPS are expected to flip positively by FY25.
Currently, Symbotic has a Zacks Rank #3 (Hold) rating, reflecting a mixed earnings revisions trend. As I mentioned near-term expectations for the stock mean it could be a rocky road, but the long-term outlook is quite exciting.
At today’s earnings meeting, analysts are projecting sales to grow 79.5% YoY to $370 million for the quarter, and earnings to climb 58%, from -$0.12 to -$0.05.
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Bottom Line
Admittedly, Symbotic trades at a sky-high valuation of 15.8x one year forward sales, but its potential is truly hard to fathom. Today, it makes up only a small minority of operations at Walmart and Target, but even taking over ops for just those two companies would grow the company significantly.
Supply chain management and warehouse automation are truly behemoth industries, and Symbotic appears to be well-positioned to take a large market share over the coming years.
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