10 Worst Falling Stocks To Buy Now

7. Symbotic Inc. (NASDAQ:SYM)

Number of Hedge Fund Holders In Q2 2024: 29

Short Interest % of Shares Outstanding: 15.42

YTD Share Price Loss: 52.40%

Symbotic Inc. (NASDAQ:SYM) is a specialty technology company that focuses on the needs of the logistics industry. It is targeting the high end niche of the warehouse industry by offering products such as automation through robots. This means that Symbotic Inc. (NASDAQ:SYM) is exposed to economic headwinds more than the broader logistics industry. While logistics as a whole performs well during a robust economy since volumes are high, businesses typically invest in technologies such as robots when they have ample cash flow at hand. Consequently, investors place a high premium on growth as part of Symbotic Inc. (NASDAQ:SYM)’s hypothesis, which was evident in the aftermath of its Q3 results. As part of the earnings release, it shared that Q4 revenue would sit at a midpoint of $465 million, which was 10% shy of Wall Street’s estimate of $517 million. Symbotic Inc. (NASDAQ:SYM)  has suffered because of higher construction costs and labor problems, and while it has a strong $22.8 billion order backlog, this is primarily due to orders from Walmart and GreenBox.

Symbotic Inc. (NASDAQ:SYM)’s management shared its expectations for the rest of the year during the Q3 2024 earnings call:

“As you recall, two years ago, we embarked on a strategy to outsource much of the manufacturing and installation of our systems. This approach enabled us to scale at a rapid pace. Based on our key learnings over multiple deployments, we plan to reabsorb a portion of the construction management processing starting this quarter, which will reduce costs. We believe bringing some of these functions back in-house will help us put a sharper focus on the implementation process and reduce costs further. In the short term, our revenue growth may slow as we make these changes. Our backlog demonstrates that demand continues to be very strong for our systems, but we will always prioritize execution on existing deployments ahead of chasing growth. On the innovation front, we made important progress on a new minibot that will populate our second breakpack installation and advance our non-ambient system development work.

We also began deployment of the first Symbiotic system for GreenBox. While this did not contribute a significant amount of revenue in the quarter, the GreenBox deployment is on schedule. I’m confident that we are making the right choices to quickly return to higher system gross margin and faster growth.”