Allbirds: Balancing Optimism and Challenges Amid Strategic Transformation

Alexandra Straton, an analyst from Morgan Stanley, maintained the Hold rating on Allbirds (BIRD – Research Report). The associated price target was lowered to $5.00.

Alexandra Straton’s rating is based on a combination of factors that highlight both the progress and challenges faced by Allbirds. Despite the company achieving its seventh consecutive quarter of adjusted EBITDA outperformance, the fundamentals remain under pressure with significant year-over-year declines in sales and margins. The strategic transformation plan shows promise, but the earliest expected turnaround is not anticipated until late 2025 or early 2026.
Moreover, the company’s guidance assumes a substantial improvement in sales and profitability in the second half of the year, which Straton views as potentially optimistic. This optimism is tempered by macroeconomic uncertainties, tariff challenges, and the uncertain consumer response to new product launches. However, the current low valuation of Allbirds, with an EV/Sales ratio below 0.1x, reflects these risks, justifying the Hold rating with a lowered price target of $5.

Based on the recent corporate insider activity of 22 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of BIRD in relation to earlier this year.