Symbotic's Q2 2024 Earnings Highlights Accelerating Deployments and Impressive Margins

Craig-Hallum's Greg Palm raised their price target on Symbotic (NASDAQ: SYM) by 9.1% from $55 to $60 on 2024/05/08. The analyst maintained their Buy rating on the stock.

In a recent research note, Palm highlighted Symbotic's second quarter 2024 earnings and provided insights into the company's future prospects. According to Palm, management's commentary during the earnings call indicated that new deployments are expected to accelerate in the second half of 2024. This, coupled with a strong contribution from existing systems in deployment, is anticipated to sustain high revenue growth rates for the company.

Palm also emphasized the impressive beat in Symbotic's first quarter EBITDA and predicted further improvement in margins throughout the year, with the potential for significant growth in 2025. Encouraging investors to take advantage of the positive sentiment surrounding Symbotic, Palm suggested accumulating shares before a potential technical breakout.

Turning to Symbotic's second quarter 2024 results, the company reported a loss per share of $0.07. While this missed the Zacks Consensus Estimate of $(0.03), it still represented a 30% improvement compared to the loss per share of $(0.10) in the same quarter of the previous year. Symbotic's revenue for the quarter stood at $424.3 million, surpassing the Zacks Consensus Estimate by 2% and marking a substantial 59% increase compared to the revenue of $266.85 million in the second quarter of 2023. Additionally, the company reported EBITDA of $22.45 million, a significant improvement from the negative EBITDA of $(11.23) million in Q2 2023.

Looking ahead, Symbotic's management provided guidance for the third quarter of 2024. They anticipate revenue in the range of $450 million to $470 million, along with EBITDA between $27 million and $29 million. Chairman and CEO Rick Cohen expressed satisfaction with the company's performance in the past quarter, highlighting their execution for customers, progress on the innovation roadmap, and solid financial results. CFO Carol Hibbard added that advancements in both software and hardware helped accelerate deployment progress, resulting in faster revenue growth, higher margins, and stronger cash generation.

The analyst consensus on Symbotic remains overwhelmingly positive, with 85.7% of top-rated analysts currently rating the stock as a Strong Buy or Buy. Another 14.3% consider it a Hold, while no analysts recommend selling the stock. This optimistic sentiment is reflected in the stock's performance, as it has seen a 15.3% increase since the latest quarterly report on May 6, 2024. Year-over-year, Symbotic's stock price has surged by an impressive 72.1%, outpacing the broader S&P 500, which has risen by 25.4% during the same period.

Greg Palm, the analyst at Craig-Hallum who raised the price target on Symbotic, is highly regarded within the industry. WallStreetZen ranks Palm in the top 16% out of 4,577 Wall Street analysts, with an average return of 13.8% and a 57.5% win rate. Palm specializes in the Consumer Cyclical, Technology, and Industrials sectors.

Symbotic Inc. is an automation technology company based in Wilmington, Massachusetts. The company provides robotics and technology solutions to improve efficiency for retailers and wholesalers in the United States. Its flagship product, The Symbotic System, is a comprehensive warehouse automation system designed to reduce costs, enhance efficiency, and optimize inventory management.

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