Shares of eco-friendly footwear company Allbirds (BIRD 5.88%) fell 24% in March according to data provided by S&P Global Market Intelligence. The company, which went public in October, has seen its stock plummet in the ensuing months. It posted a loss in its first earnings release as a public company in February, along with underwhelming guidance. Several Wall street analysts downgraded the stock, and investor sentiment remained low in March.
Allbirds is a footwear company focused on sustainable materials, for a young generation of shoppers who care about the environment. It's a popular concept, and sales have been increasing. But not as much as it might have envisioned, and it's been dealing with operational challenges as well, such as pandemic surges and supply chain disruptions.
Fourth-quarter sales increased 23% year over year to a record $97 million, and 2021 full-year sales increased 27% to $278 million. A net loss of $10 million in the fourth quarter was a slight decrease over last year. Gross margin, however, improved year over year. Another positive note was that it opened 13 new stores for a total of what is now 35 stores.
The company has expanded its product line and now offers a range of clothing and footwear. It's expecting full-year 2022 sales to increase around 30%, which unlike most retailers, is more than 2021. It's also expecting a further expansion in gross margin.
The company had its initial public offering (IPO) in October at $15, and its stock surged to $26 on the first day of trading. But it's all been downhill from there. It's now down 78% since its first-day closing price.
Shares are now trading at only 1.6 times trailing 12-month sales, down from 8.3 at the end of the December. That seems pretty cheap, but I'm not sure investors are getting any value here. The average Wall Street consensus target price is up 159%, with a high of more than 300%, and even the lowest target price is only $6, so Wall Street doesn't think it can go too much lower than the $6.19 shares trade at as of this writing.
But if you have a long-term view and are looking for undervalued quality companies, you may want to wait on this one until it shows more staying power.