BIRD: Long Term Profit Margins Will Drive Future Sentiment Higher

Analysts have trimmed their price target on Allbirds to approximately 14 dollars per share. This reflects a slightly higher discount rate and lower projected profit margins, which are only partially offset by expectations for a richer future earnings multiple.

What's in the News

• Allbirds lowered its full year 2025 net revenue guidance to a range of 161 million dollars to 166 million dollars, down from the prior 165 million dollars to 180 million dollars (company guidance).
• Within that 2025 outlook, U.S. net revenue is now expected at 127 million dollars to 131 million dollars, with international net revenue forecast at 34 million dollars to 35 million dollars (company guidance).
• Allbirds issued new guidance for the fourth quarter of 2025, projecting net revenue between 56 million dollars and 61 million dollars. This includes 47 million dollars to 51 million dollars from the U.S. and 9 million dollars to 10 million dollars internationally (company guidance).
• The company launched its first fully waterproof wool sneakers, using PFAS free durable water repellent treatments and a waterproof membrane to keep feet dry while avoiding “forever chemicals,” across three new styles priced from 140 dollars to 160 dollars (product announcement).

Valuation Changes

• Fair Value Estimate remains unchanged at approximately 14 dollars per share, reflecting a stable intrinsic value assessment.
• The Discount Rate has risen slightly from about 11.64 percent to about 11.70 percent, implying a modestly higher required return and risk premium.
• The Revenue Growth Assumption is effectively unchanged at about 1.86 percent, indicating no material revision to long term top line expectations.
• The Net Profit Margin has been reduced moderately from about 6.44 percent to about 5.71 percent, reflecting a more conservative view on long term profitability.
• The Future P/E Multiple has increased meaningfully from roughly 14.3 times to about 16.1 times, suggesting expectations for a richer valuation on future earnings.