Allbirds attracted largely positive ratings from Wall Street as the quiet period from its initial public offering ended.

Shares in the IPO were priced on November 2 at $15, ahead of the offering’s price range between $12 and $14. The stock’s first trade was $21.21, and shares closed at $28.64 on the first day of trading but have since settled closer to its IPO price.

On Monday, when the initial coverage reports arrived, shares closed at $18.82, down 93 cents.

Allbirds’ net loss totaled $14.5 million in 2019 and grew to $25.9 million in 2020, according to documents filed with the Securities and Exchange Commission. Revenues grew from $126.0 million in 2018 to $219.3 million in 2020, representing a compound annual growth rate (CAGR) of 31.9 percent.

In the third quarter ended September 30, Allbirds forecasted a loss between $15 million and $18 million, compared with a loss of $7 million a year earlier. Sales are expected to range between $61 million and $62.5 million, up from $47.2 million a year ago, up at the mid-point of the range by 30.8 percent.

The eco-friendly footwear company raised roughly $303 million in the offering. Morgan Stanley, J.P. Morgan and BofA Securities were the lead underwriters. The stock symbol is BIRD.

Among the investment firms initiating coverage, Stifel rated Allbirds with a Buy and set a $25 price target.

Stifel analyst Jim Duffy wrote, “Allbirds is a sustainability pioneer, and the brand ethos aligns with consumer megatrends for conscious consumerism and casualization. With just 11 percent brand awareness in the U.S. market, we see the brand early in development. Also, compelling digital trends and retail economics suggest a long runway for 20 percent or better growth. Investments ahead of growth provide a strong foundation for a larger business and margin leverage with scale. Given the brand distinction and runway for growth, with sustained sales momentum, we believe the stock can support a premium sales multiple until profitability potential becomes more tangible in the future year.”

Cowen initiated coverage of Allbirds at an “Outperform” rating and a $24 price target.

Cowen analyst John Kernan wrote, “Allbirds’ management and brand will accelerate disruption through materials innovation and ESG leadership. The shift to store growth and omnichannel capabilities will expand brand awareness and preference – for which our proprietary survey/benchmark work suggests an upside to the plan. We see a path to $1B+ in sales and inflection in the model.”

Piper Sandler initiated coverage of Allbirds with an “Overweight” rating and a $26 price target.

Piper analyst Erinn Murphy wrote, “We see BIRD as an innovative growth company that has woven ESG into the ethos of the company. We believe their strict commitment to sustainability is a key differentiator versus peers and will create tens of millions of loyal consumers over time. To that end, BIRD plays into several structural investment themes, including consumers shifting towards a direct relationship with brands, an acceleration of casual and athletic products and increasingly relevant ESG conversation for consumers and investors alike. We see our estimates as conservative & believe BIRD can drive towards $1/share in EPS power longer-term.”

J.P. Morgan initiated coverage with a “neutral” rating and a $21 price target.

J.P. Morgan analyst Matt Boss wrote, “We see BIRD as a global leader in sustainability within a favorable casual, health/wellness, e-commerce, and sportswear total addressable market (TAM). Further, we see multi-year growth of 20-to-30 percent+, with BIRD’s positioning versus peers differentiated through minimalist “evergreen” product designs, innovative and novel materials science, and a digitally-led omnichannel approach. That being said, BIRD’s growth is highly dependent on new store growth contributions, new product launches, and brand awareness growth. On the bottom line, BIRD has yet to achieve profitability w/mgmt outlining an opportunity to achieve mid-to-high-teens operating margins in the medium-term and 20 percent+ long-term. We rate BIRD Neutral.”

Morgan Stanley initiated coverage with an Equal Weight rating and a $23 price target.

Morgan Stanley analyst Kimberly Greenberger wrote, “BIRD is a distinctive, ESG-driven brand & one of the few +DD growth stories in our coverage. But the M-T path to profitability is less clear and requires a large inflection in performance.”

Among other investment firms initiating coverage: 

  • Robert W. Baird, Outperform, $26 price target; 
  • Bofa Securities, Buy, $23 price target; 
  • Guggenheim, Buy, $30 price target; 
  • KeyBanc Capital Markets, Overweight, $28 price target; and 
  • Telsey Advisory Group, Outperform, $25 price target.

Photo courtesy Allbirds