Oatly Shares Decline Amid Sluggish Growth and Losses

Oatly struggles as it reports sluggish growth and increased losses. Investors are concerned, and stock has dropped significantly this week. Analysts question the sustainability of its growth strategy.

Date: 13-02-2025

AI Rating: 4

Stock Performance

Oatly's stock has been under pressure, with a significant drop of 14.3% this week alone. Such a decline may reflect investor dissatisfaction with the company’s overall performance and future prospects.

Earnings and Revenue Insights

Oatly reported a 5% year-over-year revenue growth for the fourth quarter, reaching $214.3 million. This figure fell short of analyst expectations, which had anticipated revenues of $218.1 million. The inability to meet projected revenue demonstrates a slowdown, especially for a company that markets itself as a growth stock.

Despite achieving a 5% growth in sales across its three regions, the overall performance remains underwhelming and could deter potential investors.

The company experienced improvements in profitability metrics, showcasing a rise in gross margin from 23.4% to 28.8%, indicating potential for enhanced efficiency in operations. However, profitable growth is currently a lesser focus than rectifying losses.

Oatly's adjusted EBITDA loss reduced from $13.1 million to $6.1 million, suggesting the company's efforts to manage operational costs are yielding some success. Additionally, a reduction in GAAP loss per share from $0.50 to $0.15 indicates that while the company is still not profitable, it is making strides in minimizing losses.

Future Guidance

Looking forward, Oatly's guidance for revenue growth between 2% and 4% by 2025, adjusted EBITDA of $5 million to $15 million, factors in difficulties such as losing a large customer in North America. Such concerns add to the speculative nature of its recovery plans and could dampen investor enthusiasm.

Overall, while Oatly exhibits some improvements in profitability metrics, persistent actual losses and underperformance relative to expectations raise concerns about its growth strategy and potential stock recovery.

Stocks: OTLY