Oatly Faces Investor Concerns as Stock Plummets 10% on Widened Losses and Bleak Forecast
Source: The DairyNews
Shares of Oatly Inc. experienced a 10% decline on Thursday, approaching its historical low, following the oat-milk company's fourth-quarter financial report that revealed a loss more than double that of the previous year.
The company's net loss for the quarter stood at $298.7 million, or 50 cents a share, compared to $125.2 million, or 21 cents a share, in the corresponding period last year. This dismal performance significantly surpassed the FactSet analyst consensus of an 11-cent loss.
The widened loss was attributed to a surge in other operating income and expenses, soaring from $41.1 million to $204.3 million in the year-over-year comparison. This increase was primarily fueled by non-cash asset-impairment charges totaling $172.6 million and additional costs of $29 million stemming from discontinued construction projects related to certain production facilities.
While the reported revenue for the quarter reached $204.1 million, exceeding the FactSet analyst consensus of $191 million, it failed to prevent the stock from plummeting to as low as $1.10 during early trading, closing at $1.21. This sharp decline marked a stark contrast to the company's initial public offering in 2021 at $17 a share, with the current market capitalization at $800.8 million compared to the previous valuation of about $10 billion.
Looking ahead, Oatly anticipates a modest revenue growth of 5% to 10% in 2024 on a constant-currency basis. However, the company foresees an adjusted Ebitda loss ranging between $35 million and $60 million, contributing to investor skepticism.
CFRA maintained its hold rating on the stock while revising the 12-month price target to $1.20 from $1.00. Analyst Arun Sundaram acknowledged the "solid" numbers but expressed concerns about the overshadowing effect of the Ebitda loss guidance on the sales outlook. Sundaram noted Oatly's history of pushing its profitability targets, making it challenging to gauge the extent of conservatism in the current outlook.
Despite the challenging financial scenario, Oatly holds approximately $444 million in debt but maintains around $454 million in liquidity, providing a potential buffer to avoid a capital raise in the upcoming year, according to analyst Arun Sundaram.
The widened loss was attributed to a surge in other operating income and expenses, soaring from $41.1 million to $204.3 million in the year-over-year comparison. This increase was primarily fueled by non-cash asset-impairment charges totaling $172.6 million and additional costs of $29 million stemming from discontinued construction projects related to certain production facilities.
While the reported revenue for the quarter reached $204.1 million, exceeding the FactSet analyst consensus of $191 million, it failed to prevent the stock from plummeting to as low as $1.10 during early trading, closing at $1.21. This sharp decline marked a stark contrast to the company's initial public offering in 2021 at $17 a share, with the current market capitalization at $800.8 million compared to the previous valuation of about $10 billion.
Looking ahead, Oatly anticipates a modest revenue growth of 5% to 10% in 2024 on a constant-currency basis. However, the company foresees an adjusted Ebitda loss ranging between $35 million and $60 million, contributing to investor skepticism.
CFRA maintained its hold rating on the stock while revising the 12-month price target to $1.20 from $1.00. Analyst Arun Sundaram acknowledged the "solid" numbers but expressed concerns about the overshadowing effect of the Ebitda loss guidance on the sales outlook. Sundaram noted Oatly's history of pushing its profitability targets, making it challenging to gauge the extent of conservatism in the current outlook.
Despite the challenging financial scenario, Oatly holds approximately $444 million in debt but maintains around $454 million in liquidity, providing a potential buffer to avoid a capital raise in the upcoming year, according to analyst Arun Sundaram.
