Why Symbotic Stock Plunged Today

Symbotic Inc. SYM shares dropped on Tuesday after a William Blair analyst downgraded the stock.

What To Know: William Blair analyst Ross Sparenblek downgraded Symbotic from Outperform to Market Perform.

The analyst made note of several accomplishments and positive factors regarding the company, beginning with its strong third-quarter results.

The company reported breakeven earnings per share of zero cents, ahead of the analyst's estimate of a loss of one cent and the Street's estimate of a loss of three cents. Outlook appeared strong as well, with the analyst noting the company's “land-and-expand” strategy in which the company is utilizing its first-mover advantage in upstream sortation. It is expected to aid the company in taking market share in the years ahead.

However, at roughly 80.0 times William Blair's fiscal 2025 EBITDA estimate of $436 million (versus the Street at $380 million) and 11.0 times its fiscal 2025 revenue estimate of $3.2 billion (versus the Street at $2.3 billion), the analyst deemed the company's valuation to be stretched.

The analyst acknowledged that a large short-cover rally is occuring in Symbotic’s stock. Due to the apparent resulting "near-term dislocation relative to fundamentals and valuation," he continued by saying that a revisitation of the rating could be in order if shares consolidate.

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SYM Price Action: Shares of SYM closed down 9.33% at $57.61, according to Benzinga Pro.

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