Looking to add a dynamic growth stock to my ISA, I’ve been eyeing one particular company on my watchlist. Symbotic (NASDAQ: SYM) is a robotics firm supported by Softbank and Walmart, specializing in automated warehouse systems powered by artificial intelligence (AI).
Unlike some competitors, Symbotic focuses solely on automation without the distraction of a low-margin grocery business. In its recent fiscal second quarter, the company saw a 59% increase in revenue to $424 million, surpassing analyst expectations. While profitability remains a priority, Symbotic made progress towards this goal with an adjusted EBITDA of $22 million, compared to a loss of $55 million in the same period last year.
Looking ahead, Symbotic anticipates revenue of $450-470 million and adjusted EBITDA of $27-29 million for the current quarter. Despite a 300% increase in stock value since June 2022, the company is still reasonably valued with a forward price-to-sales multiple of around 1.7, and analysts forecast profitability in the near future.
However, it’s important to note that Symbotic, established as a public company in 2022, is not yet profitable. The risk lies in the potential failure to turn growth into sustained profits for shareholders. Nonetheless, the global warehouse automation market is booming, projected to reach $71 billion by 2032. With the increasing adoption of e-commerce, advancements in AI, and rising labor costs, the demand for automation is on the rise.
As a pioneer in the industry, Symbotic stands to gain significant market share as automation continues to expand. If the company reaches its full potential, its value could skyrocket. It’s an exciting prospect that I am considering for my Stocks and Shares ISA.