The Case for Symbotic as an Addition to Active Scout Team Status

Note 1: I am an amateur investor and do not pretend to know stuff. Nor could any sane human being consider, confuse or otherwise misinterpret anything they might stumble across here as investing advice.

Note 2: Baseball is here and wouldn’t it be nice if you bought some outfield bleacher tickets to the local farm team and donated them to your church and/or a local orphanage. That would be swell!

Symbotic Inc (SYM)

SYM is involved in robotic warehouse automation primarily for Retailers and Wholesalers:

Current Price: $36.10
Sitting Just Below its 52 Wk High.
Market Cap: $19.7B
5 Day Momentum: 24%
1 Month Momentum: 18.37%
YTD Momentum: 199.3%. ( Yes you read that right)

SYM Goes Public:

Debuted at $10 per share in early March 2021.

Here is what the company says about itself:

“Symbotic is an automation technology leader reimagining the supply chain with its end-to-end, A.I.-Powered robotic and software platform. Symbotic reinvents the warehouse as a strategic asset for the world’s largest retail, wholesale, and food & beverage companies. Applying next-generation technology, high-density storage and machine learning to solve today’s complex distribution challenges, Symbotic enables companies to move goods with unmatched speed, agility, accuracy and efficiency. As the backbone of commerce Symbotic transforms the flow of goods and the economics of supply chain for its customers.”

So… How They Doing:

The company reported Q2 2023 on May 1st:

  • Revenue Growth Accelerated to 177% Year-Over-Year

  • Symbotic posted revenue of $266.9 million, a net loss of $55.4 million and an adjusted EBITDA loss1 of $11.2 million for the second quarter of fiscal 2023. In the same quarter of fiscal 2022, Symbotic had revenue of $96.3 million, a net loss of $29.9 million and an adjusted EBITDA loss1 of $26.2 million.

  • Guidance:

For the third quarter of fiscal 2023, Symbotic expects revenue of $245 million to $265 million. The company also expects an adjusted EBITDA1 loss2 of $11 million to $8 million, compared to a $21.8 million adjusted EBITDA1 loss in the third quarter of fiscal 2022.

Press Release:

Conference Call Notes:

  • We have nine systems in full operation at multiple customer sites. We are currently deploying 28 additional systems and reporting over $0.25 billion of revenue in the quarter.

  • So, in two years, we have grown from a company with a sub $100 million revenue run rate to one with a $1 billion-plus revenue run rate. In addition to our significant revenue growth, our quarterly results also reflect improving adjusted gross margin, improving operating margin, and additional liquidity.

  • Recurring revenue continued to grow sequentially as deployments moved to production.

  • Our second quarter adjusted gross margin increased 100-basis points sequentially.

  • Finally, operating leverage improved as we achieved a 4% adjusted EBITDA loss rate compared to 8% last quarter and 27% last year. This was driven by our revenue growth and expanding gross margin.

Scouting Reports:

Interesting story and the company is strongly backed by Walmart.

All the Best,
BDH Investing

6 Likes

The more I poke around on SYM the more I like what I am seeing - albeit with, the central question simply being this: How come none of the multitude of smarty pants resources I consistently follow consistently over and over and over again - recommend or have the company on their radar? I call this the fail safe button of last resort which must be answered before I buy; although, not necessarily so, and especially if the company in question falls under the rule of KLA-1.

Here is a Fool review of the company from 2022:

https://www.fool.com/premium/coverage/investing/2022/07/11/walmart-likes-this-companys-technology-so-much-it/

The article concludes with this:

Given the company’s tremendous long term growth opportunity to improve the operating efficiency of the world’s largest retailers, Symbotic shares may hold appeal to patient investors. According to Vikas J. Parekh, Managing Partner at SoftBank Investment Advisors, “We believe Symbotic is at the forefront of a more than $350 billion market opportunity to reinvent warehouse automation and reshape the global supply chain.”

Of this opportunity, the company has already booked $11 billion in committed orders which bodes well for sustainable growth through 2023 and beyond. With a massive total addressable market, “game changing” technology, proven management team, and strong current billing and operating trends, Symbotic checks many of the boxes investors should look for in promising long term growth opportunities.

Not sure what to think just yet but the company is certainly making progress and checks all the right, high profile and in demand boxes: Robotics - AI - Software.

All the Best,
BDH Investing

3 Likes

Symbotic Inc. has been doing really well lately. In the first quarter of fiscal 2024, their revenue shot up to $369 million, which is a big jump from the $206 million they made the same time last year. They also managed to reduce their losses to $13 million from a much larger $68 million loss before. Plus, they’re now making a bit of profit before accounting for certain costs, known as adjusted EBITDA, hitting $14 million compared to a loss last year.

They’re predicting even better numbers for the next quarter, with revenue expected to be between $400 million to $420 million. They’re also working on delivering their systems faster and maintaining their quality, having started and completed several new deployments.

Despite the market’s ups and downs, Symbotic’s stock has been performing quite solidly. It’s a good sign that they’re growing strong and could be a promising option for investors looking into the automation sector.

In short, Symbotic seems to be on a fast track to growth, improving their financial health and expanding their operations efficiently.

4 Likes