On Monday, Citi analyst Andrew Kaplowitz announced the resumption of coverage on Symbotic Inc. (NASDAQ: NASDAQ:SYM) with a Buy rating and a price target of $37.00. According to InvestingPro data, analyst targets for Symbotic range from $10 to $60, reflecting mixed views on this volatile stock.
Kaplowitz expressed confidence in the company's potential for strong earnings growth, driven by its position as a beneficiary of investments in warehouse automation, a sector he considers underpenetrated.
Symbotic, a company specializing in robotics and automation for warehouses, has recently faced challenges due to accounting missteps. Despite these challenges, InvestingPro data shows impressive revenue growth of 52% over the last twelve months, reaching $1.79 billion. Kaplowitz acknowledged these issues but indicated that the company appears to be addressing them and working on enhancing its internal controls.
He noted that this effort is crucial for Symbotic, as it needs to demonstrate improved execution to regain investor confidence, which could remain cautious until the company delivers more consistent and higher-quality earnings reports.
Kaplowitz also pointed out that Symbotic's ongoing insourcing initiatives warrant a cautious outlook in the short term. However, he anticipates that as the company gains better control over executing projects and managing deployment costs, its execution should improve over time.
The analyst's price target of $37 reflects a belief in Symbotic's long-term growth trajectory and its ability to capitalize on the growing demand for automation in warehousing. Despite the near-term challenges, the resumption of coverage with a Buy rating suggests that Citi sees a favorable future for Symbotic as it navigates through its current operational hurdles.
In other recent news, Symbotic Inc. has been the focus of several key developments. Following a thorough review of the company's financial restatements and the filing of its annual Form 10-K, DA Davidson upgraded Symbotic's stock rating from Neutral to Buy. However, Symbotic's discovery of additional accounting errors led to a downgrade from both DA Davidson and KeyBanc Capital Markets. Despite this, TD Cowen maintained its Buy rating on the company, adjusting its price target down to $45 from $50.
Symbotic reported a 55% year-over-year increase in Q4 revenue, totaling $577 million, and ended the fiscal year with a total revenue of $1.8 billion. The company is also expecting a 40% year-over-year increase for the first quarter of 2025, bolstered by the acquisition of Veo Robotics.
The company also announced the start of construction on a second GreenBox facility in Georgia and a partnership with Walmart (NYSE:WMT) Mexico, expected to add approximately $400 million to the company's backlog.
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