Symbotic price target lowered to $40 from $54 at Needham

Needham lowered the firm’s price target on Symbotic to $40 from $54 and keeps a Buy rating on the shares. The company’s Q3 revenue topped guidance but adjusted EBITDA fell well short on weaker System gross margins that were impacted by longer construction schedules and higher costs, the analyst tells investors in a research note. Needham states however that the management expects a gross margin recovery in Q4 and expansion in Q1 as systems deployments re-accelerate, adding that while bears have the upper hand at the moment, the firm believes that Symbotic can drive earnings leverage on its rapidly growing revenue base.