Oatly’s SWOT analysis: plant-based milk maker’s stock shows signs of turnaround

Oatly Group AB has reached a significant milestone in its post-IPO journey, achieving its first quarter of positive EBITDA amid a challenging landscape for plant-based food companies. The Swedish oat milk producer has been implementing strategic changes to its operations and market approach throughout 2025, yielding mixed results across different regions. While European markets show promising growth, the company continues to face headwinds in the United States, with analysts maintaining optimistic long-term projections despite near-term challenges.

Operational Turnaround and Financial Trajectory

Oatly’s recent achievement of positive EBITDA marks a critical turning point for the company, reflecting successful efforts to restructure its supply network. This operational milestone, reported in late October 2025, represents the first time the company has reached positive EBITDA territory since its initial public offering.

The company’s financial trajectory for 2025 shows a pattern of gradual improvement, with the first quarter representing the weakest period for both sales and EBITDA. This pattern aligns with Oatly’s strategic decision to make significant brand investments early in the year, which are expected to generate stronger returns in the latter half of 2025.

For the third quarter of 2025, analysts project a modest year-over-year decline in organic sales, though the company is still expected to maintain its positive EBITDA position. Full-year organic sales growth is anticipated to land at the lower end of Oatly’s revised guidance range of flat to +1% year-over-year, while adjusted EBITDA is projected to fall just below the low end of the company’s reaffirmed guidance range of $5 million to $15 million.

Looking ahead to the next two fiscal years, earnings per share (EPS) estimates remain in negative territory, with projections of -5.18 and -3.74 for FY1 and FY2 respectively. These figures suggest that while operational improvements are yielding positive results at the EBITDA level, the path to full profitability extends beyond the current fiscal year.

Regional Performance Disparities

A notable aspect of Oatly’s current performance is the significant disparity between its European and US operations. The company has experienced positive top-line growth in Europe, attributed to a refreshed growth strategy that appears to be resonating with consumers in that market.

In contrast, recovery in the US market is expected to progress at a slower pace. This regional disparity presents both a challenge and an opportunity for Oatly, as the company works to apply successful European strategies to its US operations while navigating different market dynamics and consumer preferences.

The slower US recovery has contributed to an overall slowdown in top-line trends on a sequential basis, as noted in analyses from July 2025. This has prompted a revision of expectations for the company’s overall performance, though the strategic investments made earlier in the year are still anticipated to yield improvements as 2025 progresses.

Strategic Repositioning and Cultural Shift

Beyond operational and financial metrics, Oatly has been undergoing a broader strategic repositioning and cultural shift. In mid-November 2025, company leadership participated in a virtual fireside chat that highlighted these changes, along with discussions about the dynamics of the plant-based and oat milk categories.

This cultural shift appears aimed at better aligning the company with evolving consumer trends and preferences in the plant-based sector. The company’s long-term growth strategy emphasizes its positioning within the expanding market for plant-based alternatives, which continues to show potential despite near-term challenges faced by many companies in the space.

The strategic brand investments made in early 2025 form a key part of this repositioning effort. While these investments initially impacted financial results, creating a weaker first half of the year, they are expected to generate more significant returns as 2025 concludes and moving into 2026.

Supply Chain Optimization

A critical factor in Oatly’s recent operational improvement has been the successful restructuring of its supply network. This restructuring has contributed directly to the company’s ability to achieve positive EBITDA for the first time since its IPO.

The supply chain optimization efforts appear to have addressed previous inefficiencies, improving the company’s cost structure and operational flexibility. These improvements provide a foundation for potential future growth and enhanced profitability, assuming the company can successfully build on this operational progress with corresponding sales growth.

The stabilization of incremental investment levels, noted in analyses from October 2025, suggests that Oatly has moved beyond the initial phase of its supply chain restructuring and is now focused on leveraging these improvements to drive sustainable performance gains.

Bear Case

Will Oatly’s continued negative EPS forecasts hinder its long-term viability?

Despite operational improvements and the achievement of positive EBITDA, Oatly continues to face challenges in achieving full profitability. The current EPS forecasts of -5.18 and -3.74 for the next two fiscal years indicate that the company remains some distance from consistent positive earnings.

This extended timeline to profitability raises questions about the company’s cash burn rate and long-term financial sustainability. While operational improvements are evident, the persistent negative earnings outlook suggests that Oatly still faces significant challenges in scaling its business model efficiently.

The company’s market capitalization of approximately $0.39 billion (as of November 2025) provides limited runway for continued losses, potentially necessitating additional capital raises if profitability targets are not met within the projected timeframe. This financial pressure could constrain future strategic investments and limit the company’s ability to respond to competitive threats in the dynamic plant-based food sector.

Can Oatly overcome the regional disparity between European success and US struggles?

The stark contrast between Oatly’s European growth and its delayed US recovery presents a significant challenge to the company’s global growth ambitions. The US market represents a crucial growth opportunity due to its size and the increasing consumer interest in plant-based alternatives.

The company’s inability to replicate its European success in the US market suggests potential issues with its product positioning, distribution strategy, or competitive dynamics specific to the US market. These regional challenges could limit Oatly’s ability to achieve the scale necessary for sustainable profitability.

The extended timeline for US market recovery also creates vulnerability to competitive pressures, as other plant-based milk alternatives continue to vie for market share in this critical region. Without a successful US strategy, Oatly may struggle to justify its current valuation and deliver on long-term growth expectations.

Bull Case

How might Oatly’s achievement of positive EBITDA signal a turning point for the company?

The achievement of positive EBITDA for the first time since Oatly’s IPO represents a significant milestone in the company’s financial evolution. This development suggests that the operational restructuring and strategic investments are beginning to yield tangible results, potentially marking the start of a sustainable improvement in financial performance.

Positive EBITDA indicates that Oatly’s core business operations can generate cash flow before accounting for capital expenditures, taxes, and certain other items. This operational cash generation provides a foundation for future growth and eventual bottom-line profitability.

The timing of this achievement is particularly noteworthy, as it comes amid challenging market conditions for plant-based food companies. Oatly’s ability to reach this milestone when many peers are struggling suggests that its business model and strategic approach may be more resilient than previously recognized by the market.

How will Oatly’s brand investments impact its long-term competitive position?

Oatly’s strategic decision to make significant brand investments early in 2025 reflects a long-term approach to building market share and consumer loyalty. These investments, while initially impacting financial results, are designed to strengthen the company’s market position and differentiate its products in an increasingly competitive plant-based milk category.

The company’s cultural shift and strategic repositioning align with evolving consumer preferences for sustainable, plant-based alternatives. By investing in brand building during a challenging period, Oatly demonstrates confidence in its long-term growth algorithm and commitment to category leadership.

If these investments successfully drive increased consumer awareness and loyalty, Oatly could establish a more defensible market position with stronger pricing power and reduced vulnerability to competitive pressures. This enhanced brand equity could translate into accelerated growth in 2026 and beyond, potentially justifying the current optimistic analyst outlooks.

SWOT Analysis

Strengths

First positive EBITDA achievement since IPO

Successful restructuring of supply network

Positive momentum in European markets

Strategic brand investments beginning to yield results

Long-term growth strategy aligned with expanding plant-based market

Weaknesses

Continued negative EPS forecasts for next two fiscal years

Slowdown in top-line trends on a sequential basis

Delayed recovery in US market

Modest year-over-year decline in organic sales expected for Q3 2025

Limited market capitalization constrains financial flexibility

Opportunities

Growing consumer demand for plant-based milk alternatives

Potential to apply successful European strategies to US market

Further operational efficiencies from supply chain optimization

Cultural shift aligning with evolving consumer preferences

Stabilization of investment levels allowing focus on returns

Threats

Competitive pressures in plant-based milk category

Uncertain industry dynamics (reflected in "Neutral" industry view)

Extended timeline to full profitability

Regional market variations requiring different approaches

Potential for continued cash burn requiring additional financing

Analysts Targets

Barclays: $18.00 (Overweight) - November 14th, 2025

Barclays: $18.00 (Overweight) - October 31st, 2025

Barclays: $16.00 (Overweight) - October 29th, 2025

Barclays: $16.00 (Overweight) - July 25th, 2025

Barclays: $14.00 (Overweight) - July 23rd, 2025

Barclays: $11.00 (Overweight) - May 1st, 2025

Barclays: $10.00 (Overweight) - April 30th, 2025

This analysis is based on information available through November 18th, 2025.

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