We have noted Symbotic's positive performance during today's afternoon trading session, during which it logged a 6.0% outperformance of the S&P 500. At its current price of $53.38, the company is now trading in range of its average target price of $55.85, which calls into question its ability to keep moving higher. Analysts have given the Farm & Heavy Construction Machinery stock target prices ranging from $40.0 to $70.0 dollars per share, with an average rating of buy.
The market, on the other hand, is a bit more pessimistic. Symbotic's short interest -- meaning the percentage of its share float that is being shorted on an expectation of a price decline -- is quite high at 21.5%. The float includes only shares that are available for public trading, and excludes preferred shares.
When a stock is sold short, it means an investor has borrowed shares of the stock from their broker, and then sold them at the going market price. The investor hopes for the price to decline, so that they might buy those shares back at a lower price in the future. Once they do, they can return the borrowed shares to their broker, and keep the profit they made on the transaction.
Another way to gauge the sentiment on Symbotic is to look at the percentage of institutions that are invested in the stock. In this case, 50.2% of the shares are held by pension, mutual, and hedge funds, which shows that these institutions probably have strong confidence in the stock.
If institutions are invested in a particular stock, it shows in most cases that they have performed quality research and concluded that it is a good investment. In some cases, however, increases in institutional ownership could be a sign of a takeover attempt or proxy fight, which can actually injure share prices. Also, institutions are not infallible, and can certainly make miscalculations -- often with spectacular results.
In conclusion, we see mixed market sentiment regarding Symbotic because of an analyst consensus of some upside potential, a buy rating, an unusually large proportion of its shares sold short, and an average number of institutional investors. At Market Inference, we believe that any investment decision should be preceded by an in-depth analysis of the company's fundamental values and a comparison with similar stocks.
Here's a snapshot of some important facts to keep in mind about SYM:
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The stock has trailing 12 month earnings per share (EPS) of $-0.37
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Symbotic has a trailing 12 month Price to Earnings (P/E) ratio of -144.3 compared to the S&P 500 average of 15.97
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The company has a Price to Book (P/B) ratio of 53380.0 in contrast to the S&P 500's average ratio of 2.95
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Symbotic is a Industrials company, and the sector average P/E and P/B ratios are 22.19 and 4.06 respectively
