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Symbotic experienced a notable 12% increase in its share price over the past week. During this period, broader market trends saw a 7% gain, with major indexes like the S&P 500 and Nasdaq Composite advancing despite some volatility. The positive movement in Symbotic's stock aligns with this broader market upswing, which contrasts with the decline in tech-heavy indices influenced by losses in mega-cap tech stocks and chipmakers. Recent events around Symbotic during the week had a minimal direct impact, serving more as background noise to the positive market sentiment driving the company's stock upward.
We've identified 2 possible red flags for Symbotic that you should be aware of.
Symbotic's recent share price increase of 12% amid a broader market upswing may bolster investor confidence but carries mixed implications for the company's narrative. While the short-term rally is aligned with broader positive market sentiment, it's essential to consider how these external market trends might not directly translate to long-term business performance. Over the past three years, Symbotic's total shareholder return was 121.74%, showcasing a stronger performance compared to its 1-year relative performance in the US Machinery industry, which returned approximately negative 5.8% over the past year.
The recent developments have the potential to affect Symbotic's revenue and earnings forecasts indirectly. Acquisitions and partnerships, as mentioned in your analysis, such as with Walmart, can contribute positively to growth expectations, but their benefits are contingent on successful execution. Analysts expect annual revenue growth of 22.8% and margin improvements, potentially propelling earnings to US$573 million by 2028. However, factors such as integration challenges and execution risks could present hurdles.
With the company's share price at US$20.28, the recent price movement should also be considered relative to the analysts' consensus price target of US$32.94, indicating a 38.4% discount. This suggests potential valuation upside, but requires cautious optimism given the projected PE ratio of 48.5x by 2028, surpassing the current industry benchmark.
Assess Symbotic's future earnings estimates with our detailed growth reports.
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.