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1 high octane growth stock to consider buying for your Stocks & Shares ISA

by xyonent
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I am hoping to buy some dynamic growth shares for my ISA in the coming weeks, but valuations are high across many sectors leaving my options quite limited.

However, one stock on my watch list continues to pique my interest, thanks in part to the company’s strong second quarter results. Here’s why I’m interested:

Warehouse Supply Chain Automation

Symbolic (NASDAQ:SYM) SoftBank and Walmart We are a company that uses artificial intelligence (AI) in our software to build and operate automated warehouse systems.

The company’s robotics solutions improve efficiency and productivity for customers such as: Albertsons and the goalWalmart is no different. They can handle a lot of tasks like picking, packing, loading and unloading goods onto pallets, all of which are controlled by a warehouse management software system.

If this sounds familiar OkadaTo an extent, maybe, but what I like about Symbotic is that it’s not primarily focused on the low-margin grocery business — it’s a pure automation company.

And unlike Ocado, its overall business is growing faster, potentially putting it in the position to turn a profit sooner.

A huge improvement

The company’s revenue for the second quarter ended March 30 rose 59% from a year ago to $424 million, beating analyst expectations.

While the company understandably still prioritizes growth over profits, adjusted EBITDA of $22 million was up from an EBITDA loss of $55 million in the same period last year, so it’s encouraging to see progress toward improving profitability.

The management said:During the quarter, we initiated three system implementations and completed three production systems, delivering above-planned revenue growth, strong margins and strong cash generation.. “

The company expects third-quarter revenue of $450 million to $470 million and adjusted EBITDA of $27 million to $29 million for the current fiscal year, compared with revenue of $176 million and an adjusted EBITDA loss of $22 million in the same quarter just two years ago.

The company’s shares have risen by about 300% since June 2022. However, it still seems reasonably valued given its forward price-to-sales multiple of about 1.7 times, and the broker is also forecasting actual profits for the next two years.

Risks to consider

Symbotic only went public in 2022 and has yet to turn a profit. There are countless high-growth companies that come to the market and seem real, only to collapse. Peloton Interactive Here’s a recent example.

So the risk here is that the company won’t translate its growth into a sustainable bottom line for shareholders — the company posted a net loss of $41 million in the second quarter, and robotics remains a capital-intensive industry.

Meanwhile, the opportunity in the global warehouse automation market is huge: According to Precedence Research, it is expected to reach $71 billion by 2032, up from $16.2 billion in 2022. Symbotic and Softbank, naturally, put this figure even higher.

This growth will be driven by the further adoption of e-commerce, advancements in AI technologies, and rising labor costs and labor shortages that make automation a more attractive option for businesses.

The development of automation in warehouses seems almost inevitable to me: after all, robots need maintenance, but they don’t need sleep or dinner breaks, they don’t demand higher salaries or take occasional sick days.

As an innovator, Symbotic has the potential to capture significant market share as the industry grows, and its value will skyrocket if it realizes its full potential.

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