2023-08-01 08:31:52 ET
Symbotic ( NASDAQ: SYM ) shares fell more than 5% in pre-market trading on Tuesday as investment firm William Blair downgraded the robotics and automation company after it reported strong third-quarter results on the belief that an improving outlook is "fully priced in."
Analyst Ross Sparenblek lowered his rating on Symbotic ( SYM ) shares to market perform from outperform, noting that the stock's 51% move yesterday was likely the result of it going too far too soon despite reporting results that were "well above expectations."
"Management has done an excellent job executing on its 'land-and-expand' strategy, leveraging its first-mover advantage in upstream sortation and positioning the company well to take market share in the years ahead," Sparenblek wrote in an investor note.
However, he added that shares at trading at roughly 80 times fiscal 2025 EBITDA estimates and 11 times fiscal 2025 revenue estimates, making him believe that "valuation appears stretched."
Sparenblek also pointed out that there has been a "large" short-cover rally in Symbotic ( SYM ), which likely caused a near-term dislocation relative to fundamentals and valuation.
Despite that, the analyst said the outlook is still "robust" and that the supply chain availability is improving "well ahead of expectations."
Analysts are extremely mixed on Symbotic ( SYM ). It has a SELL rating from Seeking Alpha authors , while Wall Street analysts rate it a STRONG BUY . Conversely, Seeking Alpha's quant system, which consistently beats the market, rates SYM a HOLD .
More on Symbotic
- Symbotic Inc. Q3 2023 Earnings Call Transcript
- Symbotic: A Bubble Waiting To Burst
- Symbotic: A Fast-Growing Supply Chain Automation Company
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Symbotic slips as William Blair downgrades as improving outlook 'fully priced in'