SYM

We rate Symbotic Inc. (SYM) as a Reduce with a composite score of 49.3/100 at a current price of $56.37. The quantitative profile shows weakness across multiple dimensions, suggesting limited upside potential and elevated risk of underperformance relative to peers over the next 12 months.

The rating is primarily driven by strength in momentum (64th percentile) and value (56th percentile), which together account for the majority of the composite score. Offsetting weakness in stability (33th percentile) and investment (41th percentile) tempers our overall conviction. We assign a No Moat rating (32/100), Very High uncertainty, and Poor capital allocation.

Key items to watch: balance sheet deleveraging progress; sustainability of the current growth rate; the path to profitability. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

Symbotic Inc. holds a top-quartile position (#0 of 50) within the Manufacturing sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 49.3/100 places it at rank #2110 in our full 7,333-stock universe. With a $30.8B market capitalization, Symbotic Inc. operates at meaningful scale within the Manufacturing sector, providing competitive advantages in distribution, procurement, and customer reach.

The near-term outlook is constructive, with revenue growing at 28% and momentum in the 64th percentile confirming positive market sentiment and institutional accumulation. The combination of strong top-line growth and favorable price dynamics suggests the company is executing well on its growth strategy. Investment factor at the 41th percentile indicates reinvestment patterns that investors should monitor for sustainability.

The margin cascade tells an important story: gross margins of 19% (-23.6pp vs sector) narrow to operating margins of -4% (-5.3pp vs sector) and net margins of -2.7%, yielding a gross-to-net conversion rate of -15%. The significant margin erosion from gross to net suggests elevated operating expenses, high interest costs, or other structural drags that warrant monitoring.

At a current price of $56.37, Symbotic Inc. is trading near fair value based on current fundamentals. Our value factor score of 56/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. Valuation metrics are mixed, with no strong signal of mispricing in either direction.

The stock currently trades at a P/E of 2717.5x (a 12113% premium to the sector median of 22.3x), EV/EBITDA of 259.2x (at a premium), P/B of 7.0x, P/S of 3.0x. The above-sector P/E multiple suggests the market is pricing in superior growth or quality, which our analysis finds only partially justified by current fundamentals.

We assign a Very High uncertainty rating to Symbotic Inc.. The stock exhibits multiple compounding risk factors: elevated market sensitivity (beta of 2.33), significant leverage (212% debt-to-equity), current negative profitability (net margin -2.7%). The extreme uncertainty around future cash flows makes precise valuation difficult, and the range of outcomes is exceptionally wide. Only investors with high risk tolerance and extended time horizons should consider this name.

Specific risk factors that inform our assessment include: elevated market sensitivity (beta of 2.33); significant leverage (212% debt-to-equity); current negative profitability (net margin -2.7%); below-average price stability (33th percentile). Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 33th percentile and quality factor at the 53th percentile provide a quantitative summary of the overall risk landscape.

We identify limited risk mitigants at this time, which contributes to our very high uncertainty assessment. Investors should monitor for improvement in balance sheet metrics, margin stability, and business predictability that could warrant a downgrade in our risk assessment over time.

We rate Symbotic Inc.'s capital allocation as Poor. Key concerns include low returns on equity (-6.1%), elevated leverage (212% D/E), negative profitability, weak asset returns (ROA -1.9%). Exemplary capital allocators generate ROE above 20% and maintain conservative leverage — Symbotic Inc. significantly underperforms these benchmarks, raising questions about management's ability to create shareholder value.

Investors should scrutinize management's reinvestment decisions and balance sheet trajectory before committing capital. Poor capital allocation often compounds over time: overlevered balance sheets limit strategic flexibility, while low returns on capital destroy shareholder value. We would need to see sustained improvement in profitability metrics and balance sheet discipline before considering an upgrade.

In summary, Symbotic Inc. receives a Reduce rating with a composite score of 49.3/100 (rank #2110 of 7,333). Our quantitative framework assigns a No Moat (32/100, trend: stable), Very High uncertainty, and Poor capital allocation. The average factor score across quality, value, momentum, stability, and investment is 49/100.

Our analysis does not support a constructive view on Symbotic Inc. at this time. The combination of limited competitive advantages, very high uncertainty, and poor capital allocation suggests unfavorable risk-reward at current levels. We recommend investors avoid new positions and existing holders consider reducing exposure.