Even amidst a 20% drop for the stock after earnings, Baird analyst Mark R. Altschwager backed a Buy-equivalent rating on Allbirds ( NASDAQ: BIRD ).
Shares of the San Francisco-based footwear manufacturer crashed 20.11% in afternoon trading on Tuesday after spooking investors on Monday evening. While the reported numbers ticked in above estimates for the second quarter, cautious commentary on consumer spending, a significant headcount reduction, and a slashed sales forecast sent shares spiraling downward.
However, Altschwager told clients that these were all foreseeable updates and should not have punished the stock to the degree seen on Tuesday.
“We expected guidance/estimates to be reduced and are encouraged that management has
injected more conservatism into the near-term growth plan (current challenges forecasted to persist for the remainder of 2022) while being proactive on managing costs in the current environment,” he wrote. “We continue to like the company's long-term potential as management advances the ball on growth initiatives.”
Altschwager reaffirmed his “Outperform” rating on the stock, though he trimmed his price target by $1, moving from $9 to $8.
Read the earnings call transcript .
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Baird reiterates Buy rating on Allbirds despite post earnings plunge