Symbotic Stock Rallies After TD Cowen Says Firm’s Annual Report Has No Additional Material Changes: Retail Goes Bullish

The brokerage pointed out that critical points related to backlog confirmation, audit sign-off, and installation of appropriate procedures to prevent these issues in the future have been addressed.

Robotics warehouse automation company Symbotic Inc (SYM) soared over 18% on Thursday after TD Cowen reportedly said the company filed its annual report with no additional material changes.

The brokerage pointed out that critical points related to backlog confirmation, audit sign-off, and installation of appropriate procedures to prevent these issues in the future have been addressed.

TD Cowen has kept a ‘Buy’ rating on the stock with a $50 price target. The stock is currently trading near the $31 mark.

The update comes as a relief to investors after last week’s development when the firm disclosed it has identified an error related to system revenue recognition.

Following the developments, retail sentiment on Stocktwits flipped into the ‘bullish’ territory (63/100) from ‘neutral’ a day ago.

Most Stocktwits followers of the ticker expressed optimism on the stock’s potential in the coming times.

Symbotic had earlier disclosed that while preparing its full year financial statements, it identified occurrences during fiscal year 2024 where goods and services, primarily relating to specific milestone achievements, were expensed before the time that the corresponding milestones were achieved.

On Nov. 25, Symbotic identified errors in its revenue recognition related to cost overruns that will not be billable on certain deployments. This additionally impacted system revenue recognized in the second, third, and fourth quarters of fiscal year 2024.

The company had said the total impact of correcting these errors will be to lower system revenue, system gross profit, income (loss) before income tax, and adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) by $30 million to $40 million for fiscal year 2024.

The firm also revised its outlook for the first quarter of fiscal year 2025 and now expects revenue of $480 million to $500 million and adjusted EBITDA of $12 million to $16 million, compared to an earlier revenue guidance of $495 million to $515 million and an adjusted EBITDA estimate of $27 million to $31 million.

Despite Thursday’s rally, the firm's shares are still down by over 38% year-to-date.

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