Allbirds

BIRD · NASDAQ

$2.30−$0.03 (−1.29%)TodayMarket closed · Oct 20, 4:05 PM ET

Prev close $2.33

BIRD analyst rating

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The case for and against

Updated Nov 6, 2024

Bull case

Allbirds Inc. is positioned for improved profitability, with a goal of achieving positive adjusted EBITDA by 2025, alongside expectations of enhanced operating cash flow as indicated by the progress made in free cash flow metrics. The company's inventory management is anticipated to improve, leading to cleaner inventory levels that should positively impact gross margins in 2024, while shifts to distributor markets internationally may contribute to reductions in SG&A costs. Additionally, the success of the recent launch of the Wool Runner 2 reflects the company’s ability to innovate its product offerings, potentially enabling a turnaround in sales momentum within the footwear sector.

Bear case

Allbirds Inc. is facing significant financial challenges, including a projected revenue decline of 15%-22% for Q4 2023, reflecting subdued demand and increased competition within the U.S. market. The company reported a -21% year-over-year revenue decline, primarily driven by lower average selling prices and higher promotional activity, resulting in an adjusted EBITDA margin of -33.1%. Furthermore, Allbirds is grappling with ongoing inventory issues, despite a notable -37% year-over-year inventory reduction, which suggests persistent pressure on sales performance in an environment characterized by high promotions and excess inventory.

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