Allbirds stock price forecast: BIRD’s future is in peril

on May 24, 2024
  • Allbirds’s share price has crashed from a record high of $32 to $0.55.
  • The company’s revenue has crashed hard in the past few years.
  • It has over $100 million in cash, raising the possibility of a capital raise.

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Allbirds (NASDAQ: BIRD) stock price has become toxic and is now hovering near its all-time low. It has moved from a record high of $32.40 into an unwanted penny stock as investors worry about its future. Subsequently, its market cap has plunged to about $96 million, down from over $2 billion.

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Allbird’s future is in peril

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Allbirds, a once-popular ‘sustainable’ shoe company, has come under intense pressure in the past few years. Its attempts to expand in other areas like leggings, underwear, and puffer jackets have failed while its revenue has continued falling.

Allbirds’s annual revenue rose from $199 million in 2019 to a peak of $297 million in 2022. It then crashed to $254 million in 2023 and the trend is accelerating this year.

The company’s recent results showed that revenue tumbled by 27.6% in Q1 to over $39.3 million. While it gross margin improved, the company made a net loss of over $27.3 million. Its total annual losses in the past five years stand at over $300 million.

Allbirds has worked to transition its business. It has shed most of its other products and boosted its focus on its shoes and socks. While its new Wool Runner 2 shoe has been received well, it is unclear whether it will help to usher the company’s path to growth and profitability.

Allbirds expects that its annual revenue slowdown will continue this year. It expects that net revenue will be between $190 million and $210 million. For the second quarter, it sees its revenue coming in at between $35 million and $37 million, down from the $70 million it made a year earlier.

The other concern is whether Allbird’s balance sheet will support its transformation. It ended the first quarter with over $101 million in cash and short-term investments, down from $143 million a year earlier. For a company losing over $20 million in a quarter, this loss-making means that it might need to raise more cash this year.

Allbirds stock price forecast

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Allbirds stock

BIRD chart by TradingView 

Allbirds ended last year well as its stock jumped from the November low of $0.6400 to a high of $1.45 in December. This rebound happened as investors placed their bets that the company’s turnaround would do well.

This year, It turned down sharply as the company published weak Q4 and Q1 earnings in February and May. It has now crashed below the crucial support level at $0.6400 and the 50-day and 100-day moving averages.

Therefore, the outlook for the stock is bearish, with the next point to watch being the year-to-date low of $0.5337. A break below that level to watch will be the psychological point at $0.500. The only hope for Allbirds’s bulls is that it goes through a major short-squeeze as we saw with GameStop and AMC.

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