Earnings Release: Here's Why Analysts Cut Their Symbotic Inc. (NASDAQ:SYM) Price Target To US$18.64

Symbotic Inc. (NASDAQ:SYM) just released its latest yearly results and things are looking bullish. The results overall were pretty good, with revenues of US$593m exceeding expectations and statutory losses coming in at justUS$0.13 per share, some 46% below what the analysts had forecast. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Symbotic

After the latest results, the eleven analysts covering Symbotic are now predicting revenues of US$936.8m in 2023. If met, this would reflect a substantial 58% improvement in sales compared to the last 12 months. Per-share losses are supposed to see a sharp uptick, reaching US$0.13. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$879.8m and losses of US$0.024 per share in 2023. So it's pretty clear the analysts have mixed opinions on Symbotic even after this update; although they upped their revenue numbers, it came at the cost of a massive increase in per-share losses.

Spiting the revenue upgrading, the average price target fell 6.8% to US$18.64, clearly signalling that higher forecast losses are a valuation concern. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Symbotic analyst has a price target of US$24.00 per share, while the most pessimistic values it at US$10.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The period to the end of 2023 brings more of the same, according to the analysts, with revenue forecast to display 58% growth on an annualised basis. That is in line with its 50% annual growth over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 5.2% per year. So it's pretty clear that Symbotic is forecast to grow substantially faster than its industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Symbotic. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Symbotic's future valuation.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Symbotic analysts - going out to 2025, and you can see them free on our platform here.

Plus, you should also learn about the 2 warning signs we've spotted with Symbotic (including 1 which is potentially serious) .

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.