Symbotic (SYM 2.88%) stock absolutely crushed the market in 2023, zooming 329.9% higher according to data provided by S&P Global Market Intelligence. Here's what that number means: If you'd bought Symbotic shares worth $10,000 on the first trading day of 2023, you'd have nearly $42,300 by the time the stock market closed on Dec. 31.
Listed in June 2022, Symbotic grew leaps and bounds last year. With a big contract in place as it enters the new year, there could be no stopping this artificial intelligence (AI) automation stock.
Why Symbotic shares soared in 2023
When Symbotic released its fiscal first-quarter numbers in January 2023 (Symbotic's financial year ends on Sept. 30), it expected to double its second-quarter revenue to up to $230 million. The company surpassed its own estimates and grew its revenue by 177% in Q2.
A similar story played out through 2023, with Symbotic beating estimates quarter after quarter. In fiscal year 2023, its revenue surged 98% to nearly $1.2 billion as demand for AI-powered robotics systems grew. Symbotic specializes in warehouse automation and sells fully automated mobile robots along with software and maintenance services under long-term contracts. Retail giant Walmart is Symbotic's largest customer by revenue.
Symbotic reported a backlog of $12 billion as of Jan. 30, 2023. By the end of July, its backlog had nearly doubled to $23 billion thanks to a megadeal. Symbotic formed a joint venture called GreenBox with Japanese multinational company SoftBank. Symbotic owns a 35% stake in the venture and will sell warehouse automation systems worth $7.5 billion to GreenBox over six years, with the first order expected in fiscal year 2024.
That also means Symbotic should start generating system revenue from GreenBox this year, and recurring annual software revenue once its systems are operational. Overall, Symbotic expects to generate more than $500 million in annual recurring software, parts, and services revenue from GreenBox once its systems are operational, which could be as early as 2026.
While GreenBox was undeniably the biggest highlight of 2023 for Symbotic, it also struck an agreement with retailer Associated Food Stores to install its automation technology at a distribution center.
By fiscal 2023 Q4, Symbotic had posted its first positive adjusted earnings before interest, tax, depreciation, and amortization (EBITDA).
Symbotic stock could have a solid 2024
Symbotic will report its first-quarter numbers for fiscal year 2024 on Feb. 5. It expects to grow Q1 revenue by at least 70% year over year to around $350 million. With GreenBox also set to start generating revenue this year, Symbotic's top line should grow steadily in 2024, making it a top growth stock to buy hand over fist now.
A deal like GreenBox has also opened up a new source of revenue for Symbotic -- warehouse-as-a-service -- and that should mean a lot more opportunities for Symbotic to grow in 2024 and beyond. For perspective, Symbotic pegs the total warehouse-as-a-service market opportunity to be worth nearly $500 billion in annual revenue.
