Symbotic (SYM) Nears Earnings With A 35% Undervalued View, Is The Stock Cheap?

Symbotic (SYM) is back in focus after expectations emerged for a very large year over year earnings increase this quarter, drawing attention to how the warehouse automation company’s stock trades ahead of the report.

See our latest analysis for Symbotic.

At a share price of $42.46, Symbotic’s recent 30 day share price return of 5.62% contrasts with a 90 day share price drop of 32.07%. The 5 year total shareholder return of 331.50% highlights how long term holders have had a very different experience to those focused on shorter periods.

If Symbotic’s warehouse automation story has your attention, it can be useful to compare it with other robotics and automation opportunities through the 33 robotics and automation stocks

Symbotic’s warehouse automation business has clearly caught investor attention, yet the stock is still well below recent highs despite that long term gain. After this reset, an important question for investors is whether the current price fairly reflects the quality of the company.

Most Popular Narrative: 34.5% Undervalued

With Symbotic’s most followed narrative pointing to a fair value of $64.87 against a last close of $42.46, the gap between price and expectations is hard to ignore as earnings approach.

The acceleration of global e-commerce adoption and the resulting push for retailers and wholesalers to overtake legacy distribution models with automation is fueling strong demand for Symbotic's advanced warehouse systems. This is evidenced by their record $22.4b backlog and expanding inbound pipeline, which supports long-term revenue growth.

Read the complete narrative.

Want to see what sits behind that fair value for Symbotic? The narrative leans on rapid revenue expansion, rising margins and a future earnings profile that looks very different to today.

Result: Fair Value of $64.87 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, Symbotic’s story could change quickly if the next generation storage transition slows deployments further or if Walmart or other key customers pull back on projects.

Find out about the key risks to this Symbotic narrative.

Another View on Symbotic’s Valuation

While the narrative fair value for Symbotic comes from analyst expectations for future earnings, the SWS DCF model tells a different story. At a share price of $42.46, it values future cash flows at $80.94, suggesting the stock trades at a steep discount. Which framework do you trust more when expectations are this far apart?

Look into how the SWS DCF model arrives at its fair value.

Next Steps

With both risks and rewards in play around Symbotic, it makes sense to review the numbers and sentiment for yourself sooner rather than later. You can start with the 2 key rewards and 1 important warning sign.

Looking for more Symbotic style investment ideas?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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