Daily media coverage of intriguing and widely adopted advancements in robotics is attracting widespread interest in how these technologies impact our daily lives, yet few investors are aware of the vast scope of automation and the role it’s playing in revolutionizing the supply chain. From automated systems to picking and packing to mobile robots, the opportunities to modernize a warehouse today are expansive. One key publicly traded player in the space is Symbotic which was also recently added to the ROBO Global Robotics & Automation Index (ticker: ROBO), proving the potential growth to come for the company.
Symbotic has quickly emerged as a logistics and warehouse automation leader with a comprehensive solution to automate the processing of pallets and cases for retailers. The company has recently attracted interest on Wall Street with new analyst coverage and was the second-best performing stock in the ROBO index in April of this year with a 16% return.
SYMBOTIC’S TRANSFORMATIVE AUTOMATED SYSTEMS
It’s no secret that the race is on by retailers, manufacturers, and logistics fulfillment companies to adjust to the ever-changing needs of consumers and the on-demand culture of e-commerce. To meet these expectations, Symbotic developed an advanced system that can be introduced into warehouses globally. It uses a high-density, multi-layer buffering architecture and hundreds of robots to fulfill four key missions across the logistics journey:
- Break inbound freight down from pallet to case (singulation).
- Identify, label, and create a virtual representation (digital twin) of each case.
- Optimize storage and routing with autonomous mobile robots that can move up to 25 mph and are powered by rapid-charging ultracapacitors.
- Retrieve and palletize packages for outbound processing. In just a few years, it has amassed an enormous order backlog worth over $12 billion for more than 170 systems.
Of those 170 systems, a primary partner is Walmart, which has now committed to deploying Symbotic systems in 42 facilities nationwide. We believe that the expansion of this partnership will essentially cover the next five years of Symbotic’s business.
WHY NOW? AN INVESTMENT CASE FOR SYMBOTIC (NASDAQ: SYM)
Symbotic reported better-than-expected Q1 ’23 results with revenue of $267 million and reduced losses of $11 million at the EBITDA level. These results were largely ahead of the consensus revenue of $225 million.
We expect that this growth will continue with Symbotic ramping up potential revenue to over $1 billion in the fiscal year of 2023 (September) and over $2 billion in fiscal year 2025. That’s an annual growth rate of over 50%.
This is one of the many reasons Symbotic ended up in the ROBO index amid ~80 other constituents representative of the global value chain of robotics, automation, and enabling technologies. We believe that Symbotic’s role in revolutionizing the supply chain is the perfect case study for the growth potential in logistics and beyond. Investors looking to capture lesser-known companies like Symbotic should look to the ROBO index for a diversified portfolio of robotics and automation companies that power our industries’ future.
VettaFi recently acquired the ROBO Global Robotics and Automation Index, which is tracked by the ROBO Global Robotics & Automation Index ETF (ROBO).
By: Jeremie Capron, Director of Research, ROBO Global
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