ULTA Stock Tumbles 27% in 6 Months: What's Next for Investors?

Zacks

Dick's Sporting Goods

+1.48%

Sally Beauty Holdings

-2.06%

Ulta Beauty, Inc. ULTA has seen its shares plummet as much as 26.9% in the past six months, lagging the industry's drop of 14.6%. This specialty beauty retailer has also trailed the broader Zacks Retail - Wholesale sector and the S&P 500's respective growth of 8% and 9.3% during the same period. Closing the trading session at $389.29 yesterday, the stock stands well below its 52-week high of $574.76.

Ulta Beauty has long been a leader in the beauty retail space, known for its wide array of products and services under the “All Things Beauty, All in One Place” model. However, recent financial performance and emerging challenges in the industry indicate that the company may be facing more hurdles than anticipated, raising questions about its growth trajectory and investor appeal.

Consumer Shifts & Competitive Pressures Hurt ULTA

A major factor contributing to Ulta Beauty’s struggles is the normalization of beauty category growth. After three years of unprecedented gains, the sector is seeing a slowdown, with U.S. beauty sales increasing only 3% in the first half of 2024. The broader beauty market is also undergoing a shift, with consumers increasingly prioritizing value over premium offerings in the face of inflationary pressures and economic uncertainties. This trend could pose long-term risks for Ulta Beauty’s high-end product lines, which have historically been a key driver of profitability.

Ulta Beauty is facing significant competitive pressures that are eroding its market share in the high-margin prestige beauty segment. The beauty industry has become a magnet for new entrants, with more than 1,000 new points of distribution for prestige beauty products introduced in the past three years. This influx of competition has made it harder for ULTA to maintain its leadership position.

According to Circana data for the 13 weeks ended Aug. 3, the company maintained its market share in the mass beauty segment but lost ground in prestige beauty, driven by weakness in makeup and hair care categories. More than 80% of Ulta Beauty’s store fleet has been affected by competitive openings in nearby locations, worsening the decline in store transactions. With many stores facing prolonged sales impacts due to increased competition, it is difficult for the company to sustain the level of growth investors have come to expect.

ULTA Faces ERP Issues & Promotion Missteps

In the second quarter of fiscal 2024, ULTA faced unanticipated operational challenges stemming from its Enterprise Resource Planning (“ERP”) system transformation. While the company completed the migration to a new ERP platform in July, the transition created disruptions in store inventory allocation, complicating its efforts to optimize the guest experience. Although management is working to address these issues, the operational friction during this critical period has impacted the company’s performance, and it remains to be seen how quickly these challenges can be fully resolved.

In an effort to combat softening sales trends, Ulta Beauty ramped up promotional activity in the second quarter, which backfired. While these promotions drove traffic and sales on the company’s digital platforms, they failed to generate meaningful uplift in its brick-and-mortar stores. The increased frequency of promotions also put pressure on the company’s average selling price without driving enough incremental purchases, squeezing margins.

Weak Comps and View Cut Signal Challenges for ULTA

All of the abovementioned factors weighed on Ulta Beauty’s comparable sales in the second quarter of fiscal 2024. During the quarter, the company reported net sales growth of just 0.9%, reaching $2.6 billion, while comparable store sales decreased by 1.2%. Considering the performance in the first half and a more cautious perspective, the company revised its full-year expectations downward.

Ulta Beauty now expects fiscal 2024 net sales in the band of $11-$11.2 billion compared with the earlier mentioned $11.5-$11.6 billion range. The company reported net sales of $11.2 billion in fiscal 2023. Comparable sales are expected to remain flat to down 2% year over year. The metric was earlier anticipated to rise 2-3%. Management expects an operating margin between 12.7% and 13% compared with the previously mentioned 13.7% and 14%. For fiscal 2024, earnings are envisioned in the $22.60-$23.50 band per share, lower than the earlier stated $25.20-$26 band.

Ulta Beauty Estimates: More Pain Ahead?

Reflecting the negative sentiment around Ulta Beauty, the Zacks Consensus Estimate for EPS has seen downward revisions. Over the past seven days, analysts have lowered their estimates for both the current quarter and fiscal year by 1.7% and 0.9% to $4.50 per share and $23.21, respectively. These estimates suggest year-over-year declines of 11.2% and 10.8% from the third quarter and fiscal 2023 figures, respectively. This downward adjustment reflects a negative sentiment among analysts and suggests potential challenges in achieving projected profitability.

Is ULTA’s Price Discount a Sign of Deeper Issues?

Although Ulta Beauty’s stock is currently trading at a discount compared to its industry peers, this valuation disparity might not be as favorable as it seems. The lower price could be indicative of underlying issues rather than representing a clear investment opportunity.

ULTA is currently trading at a discount to its historical and industry benchmarks. The stock has a forward 12-month P/E ratio of 15.93, which is below the high level of 20.74 scaled in the past year. This compares with the forward 12-month P/E ratio of 16.52 for the industry.

Will Ulta Beauty’s Initiatives Turn the Tide?

While Ulta Beauty faces multiple hurdles, it has put several strategic initiatives in place to reinforce its position and drive long-term growth. These efforts focus on optimizing its omnichannel capabilities, enhancing its loyalty program, strengthening its brand portfolio and leveraging partnerships.

Like other specialty retailers, such as Sally Beauty Holdings SBH and DICK'S Sporting Goods DKS, Ulta Beauty has bolstered its omnichannel strategy to meet both in-store and online needs as consumer preferences shift toward digital-first shopping. The company offers flexible options like buy online, pick up in-store, curbside pickup and ship-from-store. Enhanced technology investments, including a revamped app and improved website, have created a seamless shopping experience. Ulta Beauty’s digital ecosystem continues to be a major growth driver, contributing to more than 20% of total sales in the second quarter of 2024.

The company’s Ultamate Rewards loyalty program, which boasts more than 43 million members, remains one of its most valuable assets for driving customer engagement and repeat purchases. To enhance customer loyalty, Ulta Beauty has continued to introduce personalized offers, exclusive rewards and tier-based incentives within the program. By strengthening its loyalty program, the company aims to deepen its connection with core customers, increase retention rates and encourage higher spend per visit.

Recognizing the evolving needs of beauty consumers, Ulta Beauty has prioritized innovation in both its product offerings and customer experiences. The company is increasingly incorporating personalization tools, such as virtual try-ons and artificial intelligence (AI) technologies, to enhance the shopping journey. Exclusive partnerships with sought-after beauty brands and retailers like Target TGT are also enhancing its product range and extending its reach.

Investors’ Roadmap for ULTA Stock

Ulta Beauty’s recent stock price decline reflects a series of struggles, including a slowdown in beauty category growth, rising competitive pressures, shifting consumer patterns and operational disruptions from its ERP system transition. A lowered fiscal 2024 guidance and negative analyst sentiment suggest that Ulta Beauty may face continued difficulties. While the company’s efforts to expand its omnichannel capabilities and enhance its loyalty program are notable, they may not fully offset current headwinds. Given the persistent issues and uncertain outlook, ULTA presents a high-risk investment at this juncture, making it prudent for investors to approach it with caution. The company currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Zacks Investment Research

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Add to Favorites

Why Dick's Sporting Goods (DKS) is a Top Value Stock for the Long-Term

Zacks

Dick's Sporting Goods

+1.48%

It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors. Luckily, Zacks Premium offers several different ways to do both.

Featuring daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, the research service can help you become a smarter, more self-assured investor.

Zacks Premium includes access to the Zacks Style Scores as well.

What are the Zacks Style Scores?

The Zacks Style Scores, developed alongside the Zacks Rank, are complementary indicators that rate stocks based on three widely-followed investing methodologies; they also help investors pick stocks with the best chances of beating the market over the next 30 days.

Each stock is given an alphabetic rating of A, B, C, D or F based on their value, growth, and momentum qualities. With this system, an A is better than a B, a B is better than a C, and so on, meaning the better the score, the better chance the stock will outperform.

The Style Scores are broken down into four categories:

Value Score

Finding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to highlight the most attractive and discounted stocks.

Growth Score

While good value is important, growth investors are more focused on a company's financial strength and health, and its future outlook. The Growth Style Score takes projected and historic earnings, sales, and cash flow into account to uncover stocks that will see long-term, sustainable growth.

Momentum Score

Momentum trading is all about taking advantage of upward or downward trends in a stock's price or earnings outlook, and these investors live by the saying "the trend is your friend." The Momentum Style Score can pinpoint good times to build a position in a stock, using factors like one-week price change and the monthly percentage change in earnings estimates.

VGM Score

If you want a combination of all three Style Scores, then the VGM Score will be your friend. It rates each stock on their combined weighted styles, helping you find the companies with the most attractive value, best growth forecast, and most promising momentum. It's also one of the best indicators to use with the Zacks Rank.

How Style Scores Work with the Zacks Rank

The Zacks Rank is a proprietary stock-rating model that harnesses the power of earnings estimate revisions, or changes to a company's earnings expectations, to help investors build a successful portfolio.

It's highly successful, with #1 (Strong Buy) stocks producing an unmatched +25.41% average annual return since 1988. That's more than double the S&P 500. But because of the large number of stocks we rate, there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.

With more than 800 top-rated stocks to choose from, it can certainly feel overwhelming to pick the ones that are right for you and your investing journey.

That's where the Style Scores come in.

You want to make sure you're buying stocks with the highest likelihood of success, and to do that, you'll need to pick stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you like a stock that only as a #3 (Hold) rank, it should also have Scores of A or B to guarantee as much upside potential as possible.

The direction of a stock's earnings estimate revisions should always be a key factor when choosing which stocks to buy, since the Scores were created to work together with the Zacks Rank.

Here's an example: a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one with Style Scores of A and B, still has a downward-trending earnings outlook, and a bigger chance its share price will decrease too.

Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.

Stock to Watch: Dick's Sporting Goods (DKS)

DICK’S Sporting Goods Inc. was founded in 1948 in New York under the labels Dick's Clothing and Sporting Goods, Inc. It was earlier reincorporated as a Delaware corporation and changed our name to Dick's Sporting Goods, Inc. in April 1999. The company’s executive office is located in Coraopolis, Pennsylvania.

DKS is a #3 (Hold) on the Zacks Rank, with a VGM Score of A.

It also boasts a Value Style Score of A thanks to attractive valuation metrics like a forward P/E ratio of 15.29; value investors should take notice.

10 analysts revised their earnings estimate upwards in the last 60 days for fiscal 2025. The Zacks Consensus Estimate has increased $0.13 to $13.89 per share. DKS boasts an average earnings surprise of 15%.

With a solid Zacks Rank and top-tier Value and VGM Style Scores, DKS should be on investors' short list.

Zacks Investment Research

Risk Warnings and Disclaimers

Add to Favorites

Intel's Shake-Up Could Boost Mag 7 Stocks. The Case to Buy the Dip. — Barrons.com

Dow Jones Newswires

Risk Warnings and Disclaimers

Add to Favorites

Zacks Industry Outlook Costco, The TJX Companies, Target and Burlington

Zacks

For Immediate Release

Chicago, IL – September 17, 2024 – Today, Zacks Equity Research discusses Costco Wholesale Corp. COST, The TJX Companies, Inc. TJX, Target Corp. TGT and Burlington Stores, Inc. BURL.

Industry: Discount Retail

Link: https://www.zacks.com/commentary/2336689/4-retail-discount-stocks-to-seize-opportunities-despite-industry-woes

The Retail – Discount Stores industry is transforming due to a combination of economic pressures and changing consumer behaviors. Inflation and higher interest rates have created a challenging environment, impacting consumer spending patterns and confidence. While discount retailers are often seen as beneficiaries during economic strain, they now face the need to swiftly adapt to maintain their competitive edge.

Industry participants have been focusing on deepening engagements with consumers, adding more compelling products, and enhancing digital and data analytics capabilities. Inventory management, supply-chain enhancement, cost-structure realignment and investments to accelerate digitization have been working in favor of companies like Costco Wholesale Corp., The TJX Companies, Inc., Target Corp. and Burlington Stores, Inc.

About the Industry

The Retail – Discount Stores industry is a significant segment within the retail sector that caters to price-conscious consumers seeking value-for-money products. These stores specialize in offering a wide range of merchandise, including groceries, household items, apparel, electronics, cleaning products, pet supplies and more, at discounted prices compared to traditional retail outlets.

Discount stores operate on a low-cost business model, focusing on cost-efficient operations, bulk purchasing and streamlined supply chains to offer competitive pricing. These stores often carry both national and private-label brands, providing a mix of products to cater to a diverse customer base. The Retail – Discount Stores industry has shown resilience, even during economic downturns, as consumers tend to prioritize value-oriented shopping.

4 Key Industry Trends to Watch

Soft Demand May Hit Revenues: Elevated interest rates, underlying inflationary pressure and geopolitical concerns continue to pose a threat to consumer spending activity. The industry's outlook heavily relies on consumer purchasing power, which has been strained by higher prices, putting pressure on family budgets and dampening demand. While inflation has shown signs of easing, it remains above the Federal Reserve's long-term target of 2%. Much will depend on the outcome of the Fed’s upcoming meeting and the extent to which any rate cuts might stimulate consumer spending activity.

Pressure on Margins to Linger: Companies in the industry are vying for a bigger share on attributes such as price, products and speed to market. The increasing dominance of e-commerce players has made the retail discount space highly competitive. This has compelled many players to strengthen their digital ecosystem, and boost shipping and delivery capabilities. While these endeavors drive sales, they entail high costs.

Apart from these, higher marketing, advertising and other store-related expenses might compress margins. However, companies have been focusing on undertaking initiatives to mitigate cost-related challenges. These include streamlining operational structures, optimizing supply networks and adopting effective pricing policies.

Consumers Seek Better Bargains: Consumers are increasingly seeking better bargains, prompting industry players to focus on offering discounted prices to attract low- to middle-income groups looking for value and convenience amid rising prices. To meet this demand, retailers are innovating with compelling products and enhancing their digital and data analytics capabilities, aiming to capture the attention of price-sensitive shoppers.

Digitization is the Key to Growth: With the change in consumer shopping patterns, industry participants have been evolving to play dual in-store and online roles. Companies are increasingly directing resources toward digital platforms, accelerating fleet optimization and enhancing their supply chains.

Initiatives to expand delivery options, such as curbside pickup and ship-to-home orders, along with contactless payment solutions, have proven beneficial. Retailers are also investing in store renovations, improved checkouts and mobile point-of-sale capabilities to keep physical stores relevant. By focusing on consumers' product preferences and their inclination toward online shopping, retailers are replenishing shelves with in-demand merchandise and ramping up investments in digitization to drive growth.

Zacks Industry Rank Indicates Bleak Prospects

The Zacks Retail - Discount Stores industry is housed within the broader Zacks Retail – Wholesale sector. The industry currently carries a Zacks Industry Rank #194, which places it in the bottom 23% of more than 250 Zacks industries.

The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates drab near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

The industry’s positioning in the bottom 50% of the Zacks-ranked industries is a result of the negative earnings outlook for the constituent companies in aggregate. Since the beginning of December 2023, the industry’s earnings estimate has declined by 0.3%.

Before we present a few stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture.

Industry vs. Broader Market

The Zacks Retail – Discount Stores industry has outperformed the broader Retail – Wholesale sector and the Zacks S&P 500 composite over the past year.

Stocks in this industry have collectively advanced 41.9%. Meanwhile, the Zacks Retail – Wholesale sector has risen 24.2%, and the S&P 500 has rallied 25.7% in the said time frame.

Industry's Current Valuation

Based on a forward 12-month price-to-earnings (P/E) ratio, which is commonly used for valuing retail stocks, the industry is currently trading at 30.63 compared with the S&P 500’s 21.45 and the sector’s 23.35.

Over the last five years, the industry has traded as high as 30.63X and as low as 21.09X, with the median being 24.83X.

4 Retail Discount Store Stocks to Keep a Close Eye On

Burlington Stores: Burlington Stores has demonstrated a strong ability to adapt to consumer trends, which gives it a competitive edge in the retail landscape. By staying in tune with customer preferences and adjusting its product offerings, the company is well-positioned to capture additional market share.

Burlington has skillfully balanced promotions with regular price sales, appealing to budget-conscious shoppers while protecting margins. Its strategic initiatives, including enhancing merchandising capabilities and optimizing store operations, have supported revenue growth. With targeted store openings, relocations and real-time inventory management, Burlington has seized opportunities and improved store productivity.

The Zacks Consensus Estimate for Burlington Stores’ current financial-year revenues and EPS suggests growth of 10% and 30.5%, respectively, from the year-ago reported figure. Burlington Stores has a trailing four-quarter earnings surprise of 18.4%, on average. Shares of this Zacks Rank #2 (Buy) company have rallied 98.7% in the past year. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Costco: The discount retailer’s growth strategies, better price management and decent membership trends have been contributing to its performance. These factors have been aiding this Issaquah, WA-based company in registering decent sales numbers. The company's distinctive membership business model and pricing power set it apart from traditional players. We believe a favorable product mix, steady store traffic, pricing strength and strong liquidity should benefit Costco.

Costco has a trailing four-quarter earnings surprise of 2.3%, on average. The Zacks Consensus Estimate for current financial-year revenues and EPS suggests growth of 5.1% and 10.4%, respectively, from the year-ago reported figure. Shares of this Zacks Rank #3 (Hold) company have surged 63.3% in the past year.

TJX Companies: TJX's business model thrives on flexibility, allowing it to swiftly adapt to shifting market trends and seize new opportunities. This agility sets TJX apart in the off-price retail space, where the ability to source and offer premium brands at discounted prices is crucial. By maintaining a nimble approach to inventory management, TJX can quickly respond to changes in consumer preferences, ensuring fresh and appealing merchandise across its stores.

The company's strong relationships with vendors also enable it to secure high-quality products at a lower cost, which it passes on to value-driven shoppers. This operational efficiency not only keeps customer traffic high but also supports sustained financial growth.

TJX Companies has a trailing four-quarter earnings surprise of 4.4%, on average. The Zacks Consensus Estimate for current financial-year revenues and EPS suggests growth of 3.6% and 10.4%, respectively, from the year-ago reported figure. Shares of this Zacks Rank #3 company have risen 30.5% in the past year.

Target: Minneapolis, MN-based Target has been actively evolving its business model to remain competitive in the ever-changing retail landscape. The company has been focused on enhancing its omnichannel capabilities, launching new brands, renovating stores and expanding same-day delivery options to provide a seamless shopping experience.

Target's commitment to integrating advanced technologies like AI and machine learning is set to improve customer engagement and operational efficiency across its platform. These have been contributing to the top line.

The Zacks Consensus Estimate for Target’s current financial-year EPS suggests growth of 6.6% from the year-ago reported figure. TGT has a trailing four-quarter earnings surprise of 20.3%, on average. We note that shares of this Zacks Rank #3 company have advanced 28.3% in the past year.

Why Haven't You Looked at Zacks' Top Stocks?

Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.

Today you can access their live picks without cost or obligation.

See Stocks Free >>

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

Media Contact

Zacks Investment Research

800-767-3771 ext. 9339

support@zacks.com

https://www.zacks.com

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Zacks Investment Research

Risk Warnings and Disclaimers

Add to Favorites

Nyse Order Imbalance 87986.0 Shares On Sell Side

Reuters

Target

-0.75%

Risk Warnings and Disclaimers

Add to Favorites

1 Hypergrowth AI Stock Wall Street Expects to Soar 89%

Barchart

Robotics companies are no longer merely theoretical concepts. They are quickly becoming central to the transformation of industries around the world. Robotics adoption is increasing across industries such as manufacturing, healthcare, logistics, and retail, thanks to technological advancements in artificial intelligence (AI).

As businesses increasingly rely on automation to streamline operations and cut costs, robotics companies are emerging as major players with the potential to reshape the global economy. Symbotic is one of the emerging players in this space. It is best known for its cutting-edge AI-powered robotic systems, which improve supply chain and warehouse management. SYM stock rose an impressive 329% in 2023, powered by strong revenue growth.

However, SYM stock has fallen 55.7% so far this year, while the S&P 500 Index has gained 18%. Nonetheless, Wall Street believes the stock could potentially climb by 88.9% over the next 12 months.

Surge in Automation Boosts Symbotic’s Financials

The rise of e-commerce and the COVID-19 pandemic highlighted the importance of automation due to the scarcity of manual labor. Warehouse automation, powered by robots, has become an essential component in ensuring the smooth operation of supply chains.

Symbotic’s end-to-end, AI-powered robotics and software platform can pick, sort, and pack goods with minimal human intervention. Symbotic's collaboration with global retailer Walmart has been a critical growth driver. Walmart has invested heavily in Symbotic's AI and robotic automation technology, with an 11% stake in the company. Symbotic's robotic systems will be installed in 42 of Walmart's distribution centers across the nation, with the goal of reducing costs and increasing efficiency.

Other customers include Target , Albertsons , Giant Tiger, Associated Food Stores, and many others. In the third quarter of fiscal 2024, total revenue at Symbotic increased by 57.7% to $492 million. While this is impressive, third quarter growth was lower compared to the first two quarters of fiscal 2024. Notably, total revenue increased by 78% in Q1 and 59% in Q2.

Management stated that the revenue slowdown is due to Symbotic improving its deployment process, which included ramping up five new systems in Q3. According to management, this should result in increased revenue in the first quarter of fiscal 2025.

Symbotic currently has 21 fully operational systems. Furthermore, its backlog of committed contracted orders totaled $22.8 billion.

Despite strong revenue growth, Symbotic is still working to maintain profitability. Its fiscal Q3 net loss of $0.02 per share came in lower compared to the year-ago quarter net loss of $0.07. High R&D costs and the significant capital required to scale its technology may have an impact on the company's financials in the short term. However, this is not unusual for a growing company.

While the current quarter was not profitable, the consensus estimate for the fourth quarter is a profit of $0.02. Recently, the company acquired all assets of industrial robot maker Veo Robotics. Symbotic expects the integration of Veo’s FreeMove 3D depth-sensing computer vision system into its warehouse automation system will enhance productivity.

Analysts who cover SYM anticipate significant revenue growth in the coming years. In 2024, the company's revenue could increase by 49.3% to $1.7 billion, with an additional 35.8% growth in 2025.

Moreover, analysts also expect the company to report a profit of $0.18 in 2024, up from a loss of $0.37 in 2023. Furthermore, earnings are expected to rise 161.1% to $0.46 in 2025.

What Does Wall Street Say About Symbotic Stock?

Recently, Craig-Hallum analyst Greg Palm assigned a “buy” rating for SYM stock. Separately, TD Cowen analyst Joseph Giordano maintained a “buy” rating on the stock with a price target of $43.

Overall, Wall Street remains bullish on Symbotic stock, with an overall “moderate buy” rating. Out of the 16 analysts in coverage, nine have a “strong buy” recommendation, two propose a “moderate buy,” four rate it a “hold,” and one suggests a “strong sell.”

Based on analysts' average price target of $42.93, Wall Street expects a potential upside of about 89% in the next 12 months. Plus, the Street-high target estimate of $60 implies the stock could climb by 164% from current levels.

Priced at 1.25x forward sales, SYM stock seems cheap for the hypergrowth expected in the industrial automation industry.

The Bottom Line on Symbotic Stock

The global warehouse automation market is expected to grow at a compound annual growth rate (CAGR) of 16.2% from 2024 to 2029, reaching $54.5 billion. As a market leader, Symbotic is well-positioned to capitalize on this trend. The company's strong partnerships with retail giants, cutting-edge technology, and expanding market presence lay the groundwork for future growth.

Furthermore, as other industries move toward automation, Symbotic will be able to capitalize on new growth opportunities.

No doubt, SYM's short-term prospects appear appealing and attainable. That said, growth stocks also carry risks. Symbotic's stock may offer significant upside to those with a long-term investment horizon and a belief in the ongoing evolution of automation as the company scales its operations and expands its reach across industries.

On the date of publication, Sushree Mohanty did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.

Risk Warnings and Disclaimers

Add to Favorites