We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Symbiotic Stock Plunges 48% YTD: How Should Investors Play?
Read MoreHide Full Article
Symbiotic Inc. (SYM - Free Report) shares have plunged 47.9% in the year-to-date period against the 58.8% rally of its industry and the 29.1% rise in the Zacks S&P 500 Composite.
YTD Price Performance
Image Source: Zacks Investment Research
The stock is trading below its 50-day moving average, indicating bearish sentiment among investors.
Stock Trades Below 50-SMA
Image Source: Zacks Investment Research
SYM’s performance underperforms its close competitors, IDEX Corporation (IEX - Free Report) and Pentair plc (PNR - Free Report) . IEX and PNR shares have gained 6.3% and 50.1% in the year-to-date period, respectively.
The recent correction in Symbiotic’s shares might be appealing to investors. But the important question arises — is this the right time to invest? Let’s find out.
Symbiotic’s Platforms Are a Game Changer
SYM’s platforms are built on autonomous hardware and system software, allowing independent movement and package handling within the warehouses. Compared with the infrastructure of a traditional warehouse, SYM’s integrated hardware and software solutions can automate workflows and assist retailers in lowering their labor costs in the physical warehouses and distribution centers.
Symbots are the company’s fully autonomous mobile goods handling robots powered by swift-charging ultracapacitors. This technology could allow these robots to work all day without idle time. These Symbots can lift boxes and pick up goods, replacing human labor. By integrating them with SYM’s platforms, they can maximize warehouse automation.
SYM’s AI-armed technology integrated within platforms and solutions could augment physical retailers’ return on investment and lower labor spending. As a result, the company has built fruitful relationships with industry giants, including Walmart, which is not only SYM’s biggest customer but also holds 11% of the company’s shares.
SYM’s International Expansion Shows Potential For Success
Symbiotic recently entered into a commercial agreement with Walmex to incorporate SYM’s automation systems in two of the retailers located near Mexico City. During the fourth quarter of fiscal 2024, management expressed that they are heavily interested in the future expansion in South America. Nearly $400 million to the backlog will be added by Walmart Mexico with the implementation starting in the first quarter of fiscal 2025.
The contract win in Mexico paves a strong path for the company's global expansion. Symbiotic plans to expand its services to Canada, Europe, and South America.
SYM’s ROI Might be Affected by Steel Prices
Steel prices have been a significant portion of the company’s cost of goods sold. The majority of SYM’s steel contracts have pass-through clauses, which allow the company to recover the cost of steel from its customers. Management is focused on finding a shorter return once they are on contract, which might enable them to swiftly adjust the prices they charge their customers to reflect changes in the price of steel.
However, passing the increasing price onto its customers during any additional tariff on steel will increase the total project cost for retailers, lowering the return on investment.
Symbiotic Stock Looks Expensive
The SYM stock is currently expensive and might not be appealing to investors due to an overvaluation. It is priced at around 176.3 times forward 12-month earnings per share, which is higher than the industry’s average of 41.7 times. When looking at the trailing 12-month EV-to-EBITDA ratio, SYM is trading around 1280.4 times, way above the industry’s average of 88.8 times.
SYM’s Liquidity Position Lags Industry
In the fourth quarter of fiscal 2024, Symbiotic’s current ratio of 1.33 underperformed the industry average of 2.16. Despite having a lower liquidity position than its industry, a current ratio of more than 1 suggests that the company will be able to pay off its short-term obligations easily.
Image Source: Zacks Investment Research
SYM’s FY25 Top and Bottom-Line Prospects Look Strong
The Zacks Consensus Estimate for Symbiotic’s fiscal 2025 revenues is pegged at $2.3 billion, implying 24.7% year-over-year growth. The consensus estimate for SYM’s fiscal 2025 earnings stands at 12 cents per share, suggesting a more than 100% year-over-year increase.
Analyzing the Right Entry Point for SYM
Symbiotic’s stock has significantly declined this year, and we anticipate it will fall further in the future.
SYM’s unique platform technology, the opportunity to expand internationally, and strong top-and-bottom-line outlook make it favorable for investing in the long run. However, potential investors should remain calm and watch for further adjustments in SYM’s stock to find the right entry point.
Image: Bigstock
Symbiotic Stock Plunges 48% YTD: How Should Investors Play?
Symbiotic Inc. (SYM - Free Report) shares have plunged 47.9% in the year-to-date period against the 58.8% rally of its industry and the 29.1% rise in the Zacks S&P 500 Composite.
YTD Price Performance
The stock is trading below its 50-day moving average, indicating bearish sentiment among investors.
Stock Trades Below 50-SMA
SYM’s performance underperforms its close competitors, IDEX Corporation (IEX - Free Report) and Pentair plc (PNR - Free Report) . IEX and PNR shares have gained 6.3% and 50.1% in the year-to-date period, respectively.
The recent correction in Symbiotic’s shares might be appealing to investors. But the important question arises — is this the right time to invest? Let’s find out.
Symbiotic’s Platforms Are a Game Changer
SYM’s platforms are built on autonomous hardware and system software, allowing independent movement and package handling within the warehouses. Compared with the infrastructure of a traditional warehouse, SYM’s integrated hardware and software solutions can automate workflows and assist retailers in lowering their labor costs in the physical warehouses and distribution centers.
Symbots are the company’s fully autonomous mobile goods handling robots powered by swift-charging ultracapacitors. This technology could allow these robots to work all day without idle time. These Symbots can lift boxes and pick up goods, replacing human labor. By integrating them with SYM’s platforms, they can maximize warehouse automation.
SYM’s AI-armed technology integrated within platforms and solutions could augment physical retailers’ return on investment and lower labor spending. As a result, the company has built fruitful relationships with industry giants, including Walmart, which is not only SYM’s biggest customer but also holds 11% of the company’s shares.
SYM’s International Expansion Shows Potential For Success
Symbiotic recently entered into a commercial agreement with Walmex to incorporate SYM’s automation systems in two of the retailers located near Mexico City. During the fourth quarter of fiscal 2024, management expressed that they are heavily interested in the future expansion in South America. Nearly $400 million to the backlog will be added by Walmart Mexico with the implementation starting in the first quarter of fiscal 2025.
The contract win in Mexico paves a strong path for the company's global expansion. Symbiotic plans to expand its services to Canada, Europe, and South America.
SYM’s ROI Might be Affected by Steel Prices
Steel prices have been a significant portion of the company’s cost of goods sold. The majority of SYM’s steel contracts have pass-through clauses, which allow the company to recover the cost of steel from its customers. Management is focused on finding a shorter return once they are on contract, which might enable them to swiftly adjust the prices they charge their customers to reflect changes in the price of steel.
However, passing the increasing price onto its customers during any additional tariff on steel will increase the total project cost for retailers, lowering the return on investment.
Symbiotic Stock Looks Expensive
The SYM stock is currently expensive and might not be appealing to investors due to an overvaluation. It is priced at around 176.3 times forward 12-month earnings per share, which is higher than the industry’s average of 41.7 times. When looking at the trailing 12-month EV-to-EBITDA ratio, SYM is trading around 1280.4 times, way above the industry’s average of 88.8 times.
SYM’s Liquidity Position Lags Industry
In the fourth quarter of fiscal 2024, Symbiotic’s current ratio of 1.33 underperformed the industry average of 2.16. Despite having a lower liquidity position than its industry, a current ratio of more than 1 suggests that the company will be able to pay off its short-term obligations easily.
SYM’s FY25 Top and Bottom-Line Prospects Look Strong
The Zacks Consensus Estimate for Symbiotic’s fiscal 2025 revenues is pegged at $2.3 billion, implying 24.7% year-over-year growth. The consensus estimate for SYM’s fiscal 2025 earnings stands at 12 cents per share, suggesting a more than 100% year-over-year increase.
Analyzing the Right Entry Point for SYM
Symbiotic’s stock has significantly declined this year, and we anticipate it will fall further in the future.
SYM’s unique platform technology, the opportunity to expand internationally, and strong top-and-bottom-line outlook make it favorable for investing in the long run. However, potential investors should remain calm and watch for further adjustments in SYM’s stock to find the right entry point.
Symbiotic carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.