BTIG analyst Janine Stichter has reiterated their neutral stance on BIRD stock, giving a Hold rating today.
Janine Stichter’s Hold rating for Allbirds (BIRD) is the result of a range of factors. Firstly, while the Q3 results were mostly consistent with expectations, emphasis is increasingly being placed on the company’s potential to restructure its expenses, diversify its offerings, and refine its go-to-market approach in order to achieve profitable growth by 2025 and beyond. Stichter acknowledges the progress made in terms of cost-saving measures, inventory reductions, and the promising prospects of a more profitable international business. However, she also notes that it is still early days for the uptake of the Wool Runner 2, the company’s pioneering product under its updated vision, and does not anticipate any significant impact from new product initiatives until the second half of 2024.
Furthermore, the process of executing a transformation in the midst of a challenging macroeconomic environment and a tough promotional backdrop, expected to persist into 2024, presents additional challenges. Despite the company’s valuation being below that of its historical average and its peers, Stichter cites a lack of near-term catalysts as a reason for maintaining her Neutral rating. She also reduces her estimates based on lower near to medium-term revenue and gross margin expectations. The Q3 revenue fell by approximately 21% year on year, which was at the lower end of the guidance range. The company’s gross margin declined by around 130 basis points year on year, largely due to a lower average selling price as the company continues to strategically markdown to clear through inventory.
Stichter covers the Consumer Cyclical sector, focusing on stocks such as Steven Madden, VF, and Foot Locker. According to TipRanks, Stichter has an average return of -0.7% and a 33.77% success rate on recommended stocks.
In another report released today, Piper Sandler also maintained a Hold rating on the stock with a $1.80 price target.
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Allbirds (BIRD) Company Description:
Allbirds Inc is a global lifestyle brand that innovates with naturally derived materials to make footwear and apparel products. Its primary source of revenue is from sales of shoes and apparel products in its directly owned digital and physical retail channels.
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