Case Study on Symbotic's Margins

Shares of Small-cap None company Symbotic were up 7.3% during today's afternoon session, as the S&P 500 posted a 1.0% change. Today's upwards movement shows that investor interest in SYM stock is strong -- but how closely have they studied the company's margins?

While Symbotic's gross margins for the last year are positive, we are concerned that the company's operating margins are in the red. Gross margins take into account only the cost of revenue, or variable costs -- meaning the cost directly associated with producing the products or providing the service offered by the company.

Operating margins, on the other hand, take into account the company's overhead as well. Overhead, also called fixed costs, includes the company's rent, salaries for personnel not included in cost of revenue, equipment and supplies, amortization, and depreciation. Operating margins tell you about how efficiently Symbotic is run, and gross margins tell you how profitable its product line is.

Date Reported Revenue ($ k) Cost of Revenue ($ k) Gross Margins (%)
2023 900,167 753,214 16
2022 593,312 493,665 17
2021 nan nan
2020 92,086 111,016 -21
Date Reported Total Revenue ($ k) Operating Expenses ($ k) Operating Margins (%)
2023 900,167 324,062 -19
2022 593,312 240,022 -5
2021 nan 6,392
2020 92,086 91,447 -119

The table above tells us that, on average, Symbotic has not been profitable over the last four years, which should be a warning sign to prospective investors. One bright spot, however, is that the company's operating margins are growing at an average yearly rate of 36.8%.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.