Founder, BWS Financial Inc

Hamed Khorsand

Founder

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BWS Financial Inc

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Equity Bottom-Up

<ul>
<li>SYM reported fiscal fourth quarter results that at first glance were better than expected, but really included several accounting events that seem to hide how SYM had a poor quarter.</li>
<li>Along with the quarterly results, SYM disclosed a restatement of prior quarterly results where $39.1 million of high-margin revenue was transferred to the fourth quarter. </li>
<li>When we initiated coverage of SYM we were worried about the timing of revenue associated with Walmart (WMT) and not anticipating an accounting mess.</li>
</ul>


SYM reported fiscal fourth quarter results that at first glance were better than expected, but really included several accounting events that seem to hide how SYM had a poor quarter.
Along with the quarterly results, SYM disclosed a restatement of prior quarterly results where $39.1 million of high-margin revenue was transferred to the fourth quarter. 
When we initiated coverage of SYM we were worried about the timing of revenue associated with Walmart (WMT) and not anticipating an accounting mess.


<ul>
<li>SYM) announced it would place automation system at two distribution centers being built by Walmex. Mexico would be brand new market for SYM, but the relationship with WMT is not. </li>
<li>The distribution centers SYM is poised to initially go into were announced in 2022. The 2022 news includes timing of the distribution centers in Tlaxcala and El Bajio.</li>
<li>The rate of systems being accepted slowed in the third quarter. We continue to believe this could become the primary headwind for SYM’s quarterly report and stock price. </li>
</ul>


SYM) announced it would place automation system at two distribution centers being built by Walmex. Mexico would be brand new market for SYM, but the relationship with WMT is not. 
The distribution centers SYM is poised to initially go into were announced in 2022. The 2022 news includes timing of the distribution centers in Tlaxcala and El Bajio.
The rate of systems being accepted slowed in the third quarter. We continue to believe this could become the primary headwind for SYM’s quarterly report and stock price. 


<ul>
<li>SYM has disclosed one additional customer site location, Cullman, Alabama, in third quarter 2024. This one location brings the total number of sites where customers have accepted SYM’s to twenty.</li>
<li>We believe the slowdown in system placements and acceptance has continued into the third quarter and the challenges faced in the second quarter are likely to continue.</li>
<li>SYM has been promising several product placements progressing from backlog to acceptance. We believe this pace has slowed with only one location so far in Q3</li>
</ul>


SYM has disclosed one additional customer site location, Cullman, Alabama, in third quarter 2024. This one location brings the total number of sites where customers have accepted SYM’s to twenty.
We believe the slowdown in system placements and acceptance has continued into the third quarter and the challenges faced in the second quarter are likely to continue.
SYM has been promising several product placements progressing from backlog to acceptance. We believe this pace has slowed with only one location so far in Q3


<ul>
<li>SYM had an increase in system costs. SYM’s management highlighted delays in construction of systems in the quarter resulting in the Company to taking back EPC work.   </li>
<li>SYM suggests bringing the EPC work in-house would be more efficient. We do not agree. This creates additional headwinds as to timing and could create a new risk for SYM.  </li>
<li>During the earnings call, SYM’s management referred to delays in permits and product delivery resulting in people not having anything to do. This is a characterization of a construction/contracting company.</li>
</ul>


SYM had an increase in system costs. SYM’s management highlighted delays in construction of systems in the quarter resulting in the Company to taking back EPC work.   
SYM suggests bringing the EPC work in-house would be more efficient. We do not agree. This creates additional headwinds as to timing and could create a new risk for SYM.  
During the earnings call, SYM’s management referred to delays in permits and product delivery resulting in people not having anything to do. This is a characterization of a construction/contracting company.


<ul>
<li>We are initiating coverage of Symbotic (SYM) with a Sell Rating and $10 target. </li>
<li>The latest quarterly report from SYM suggests there could be little in the form of catalysts with the biggest news being related to a business owned by the CEO</li>
<li>We believe investors are putting too much reliance on SYM generating revenue from Wal-Mart (WMT) even though WMT is also using SYM’s competition for warehouse automation. </li>
</ul>


We are initiating coverage of Symbotic (SYM) with a Sell Rating and $10 target. 
The latest quarterly report from SYM suggests there could be little in the form of catalysts with the biggest news being related to a business owned by the CEO
We believe investors are putting too much reliance on SYM generating revenue from Wal-Mart (WMT) even though WMT is also using SYM’s competition for warehouse automation. 


United States

Symbotic Inc operates as an automation technology company. The Company specializes in supply chain with its end-to-end, AI-powered robotic, and software platform. Symbotic serves the retail, wholesale, and food companies worldwide.

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Symbotic (SYM US)

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