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Investing.com - Seaport Global Securities downgraded Serve Robotics (NASDAQ:SERV) stock rating from Buy to Neutral following the company’s second-quarter results. The stock, currently trading at $10.38, has experienced significant volatility, falling nearly 47% over the past six months while maintaining a strong balance sheet with more cash than debt.
The research firm noted that while second-quarter revenues were in line with expectations and Serve Robotics remains on track to deploy 2,000 robots by the end of 2025, revenue growth is expected to be more heavily weighted toward late 2026. According to InvestingPro data, the company’s current revenue growth forecast for FY2025 stands at 226%, though analysts don’t expect profitability this year.
Seaport Global lowered its revenue and EBITDA estimates for Serve Robotics, citing near-term expense increases alongside the delayed revenue ramp. The firm expects shares to remain range-bound until significant improvements in key revenue drivers emerge, likely throughout 2026. With current InvestingPro Fair Value analysis suggesting the stock is overvalued, investors might want to carefully consider their entry points. Discover 12 more exclusive insights and detailed financial analysis with an InvestingPro subscription.
Despite the downgrade, Seaport Global maintained a positive long-term outlook for Serve Robotics, citing a large total addressable market estimated at $7-10.5 billion for sidewalk robots in the U.S.
The firm also highlighted Serve Robotics’ positioning as a potential long-term winner in last-mile delivery, expected strong revenue growth through its Uber (NYSE:UBER) Eats partnership, and projected long-term EBITDA margins exceeding 30% driven by scale efficiencies.
In other recent news, Serve Robotics Inc. reported its second-quarter 2025 earnings, showing a revenue of $641,000. This figure represents a 46% sequential growth, indicating a positive trend in revenue generation. However, the company reported an earnings per share (EPS) of -$0.24, which fell short of market expectations. Despite the revenue increase, the earnings miss has raised concerns among investors about the company’s financial health. Analysts have not publicly upgraded or downgraded the stock following this report. The results highlight the challenges Serve Robotics faces in balancing revenue growth with profitability. These developments are part of the company’s ongoing efforts to improve its financial performance.
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