Investors Are Bailing Out of Symbotic (SYM). Here's Why.

With a sudden -1.1% drop to $56.36, Symbotic has Wall Street wondering if its shares will keep moving past its target price of $55.85. With an average rating of buy, and analysts assigning target prices from 40.0 to 70.0 dollars per share, investors will be betting heavily on the Farm & Heavy Construction Machinery stock's next move.

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.

One way to get an idea of the market sentiment on a stock is to check its rate of institutional ownership. In the case of Symbotic, institutional investors own 50.2% of the shares, which indicates they have a very high stake in the company. What does this really tell us?

Institutional investors such as hedge funds, investment firms, and wealth managers devote significant resources to identifying good investments. If they have decided to invest in SYM, it probably means they believe it is a solid investment choice.

But it could also mean they are buying up shares in an effort to acquire the company or to get seats on the board of directors. Also bear in mind that institutions are fallible (just maybe not quite as fallible as the average retail investor), so they may simply be wrong when they think they've found a good stock.

Overall, there is mixed market sentiment towards Symbotic because of an analyst consensus of little upside potential, a buy rating, an unusually large proportion of its shares sold short, and an average number of institutional investors. Investors should not base their decisions on market sentiment only, they should also be aware of a stock's fundamentals before committing.

At a glance, here are some essential statistics you may want to know about SYM:

  • It has trailing 12 month earnings per share (EPS) of $-0.37 per share

  • Symbotic has a trailing 12 month Price to Earnings (P/E) ratio of -152.3 while the S&P 500 average is 15.97

  • The company has a Price to Book (P/B) ratio of 56360.0 in contrast to the S&P 500's average ratio of 2.95

  • Symbotic is a Industrials company, and the sector average P/E and P/B ratios are 22.19 and 4.06 respectively

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.