Turning a $10,000 investment in stock into $1 million in a decade is a very ambitious target. To achieve this exceptional goal of 100x returns, a stock has to grow at a minimal compound annual growth rate (CAGR) of over 58% for a whole decade. Hence, the stock must significantly outpace the benchmark S&P 500, which has averaged just 10.2% annual returns over the past century.
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Only a few companies, such as Nvidia and Tesla, have ever achieved this feat in their explosive growth phases. What sets these companies apart is their visionary management, technological edge, and vast, underserved addressable markets.
Finding potential 100-baggers for the next decade is no easy task. However, artificial intelligence (AI)-powered warehouse automation player Symbotic (SYM -1.55%) is showing all signs of being an early-stage growth company. Can it become the next wealth-generating machine for retail investors?
Large addressable market
Symbotic developed an end-to-end AI-powered robotics platform to automate and optimize various aspects of warehouse operations, distribution centers, and supply chains. The system operates with hundreds of autonomous mobile robots, known as SymBots, which are equipped with advanced machine learning capabilities to enhance accuracy and efficiency in warehouse operations.
What works in Symbotic's favor is the huge yet underpenetrated market opportunity in the warehouse automation space. According to Precedence Research, the global warehouse automation market is projected to grow from $21.8 billion in 2024 to $95.4 billion by 2034. Explosive growth in the e-commerce market, omnichannel retailing, labor shortages, and escalating operational costs are key catalysts driving the increasing need for warehouse automation.
Despite the vast market potential, approximately 80% of warehouses globally are still operated manually, with only 5% fully automated. This emphasizes the significant runway available for Symbotic -- a significant factor that can help the company's stock grow 100x in the next 10 years. This is because companies that report extraordinary returns are usually the early players riding significant secular tailwinds.
Technological edge and strong financials
Symbotic's AI-powered platform currently processes up to 10 terabytes of data daily and ensures 99.9999% accuracy in warehouse operations. The company also demonstrated a 30% improvement in the time required to install systems for clients, when normalized for size, in recent projects. This enables faster deployment and improved capital efficiency.
Symbotic demonstrated robust growth, with revenues rising 40% year over year to $550 million and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) growing dramatically from $9 million last year to $35 million in the second quarter of fiscal 2025. The company also boasts a massive $22.7 billion contracted backlog, which will ensure years of revenue visibility.
Can Symbotic become a 100-bagger?
Symbotic currently trades at 8.2 times sales, significantly lower than its three-year average of 12.5x. Although most software companies trade at an average of 10 times their sales, high-growth ones can command multiples of up to 20 times sales. Considering Symbotic's current valuation, the market appears to have adopted a conservative stance, likely due to its hybrid hardware-software model.
In the best-case scenario, analysts expect Symbotic's revenues to be $2.3 billion in fiscal 2025, $3.3 billion in fiscal 2026, and $4 billion in fiscal 2027. While this implies an annual compounded annual growth rate (CAGR) of 31.5% from 2025 to 2027, such aggressive growth rates cannot be sustained for a decade. For a more realistic best-case projection, we apply a more conservative CAGR of 19.3% until 2035, which is consistent with base-case analyst growth estimates from 2025 to 2027.
Subsequently, Symbotic's revenues are expected to be around $18.4 billion in fiscal 2035. Furthermore, assuming that an improved revenue mix due to the shift toward software services drives Symbotic's price-to-sales (P/S) multiple to around 18x to 20x, the company's market capitalization would be $331 billion to $368 billion in 2035 -- approximately 19.6 to 21.8 times the current market capitalization.
In the base-case scenario, analysts expect Symbotic's revenues to be $3.7 billion in fiscal 2027. If you assume a long-term CAGR of 15.9% until 2035, in line with the long-term growth estimates for the global warehouse automation market, Symbotic's revenues can reach $11.7 billion by 2035.
Assuming a slower growth of the software business and a balanced hardware-software revenue mix, Symbotic's P/S multiple can be around 10x-12x sales by 2035. This translates into a market capitalization of nearly $117 billion to $140 billion, which is approximately 6.9 to 8.3 times the current market capitalization.
Finally, in the worst-case scenario, analysts expect Symbotic's revenues to be $3.3 billion in fiscal 2027. Assuming a long-term revenue CAGR of 9.6%, in line with overall market growth estimates for 2025 to 2027, Symbotic's revenues can reach $6.9 billion by 2035. Assuming compression in valuation multiples due to increasing competition and execution challenges, Symbotic's P/S multiple can be around 6x to 8x sales by 2035. This translates into a market capitalization of nearly $41.4 billion to $55.2 billion, approximately 2.4 to 3.3 times the current market capitalization.
Based on these calculations, it seems that while 100-bagger returns remain an extremely low-probability event, Symbotic still offers compelling risk-adjusted returns even in the worst-case scenario. Hence, the stock appears to be a smart buy for long-term investors willing to overlook some short-term noise.
