Allbirds (NASDAQ: BIRD) shares tanked 50% from their recent highs on November 3, however, according to Morgan Stanley, it is the perfect time to buy the stock.
“Valuation appears compelling, at ~4 times consensus 2023 estimated EV/Sales compared to its ~10 times post-IPO high and peers with comparable revenue growth at 5 times plus. Tempered valuation makes for an attractive entry point, particularly as an opportunity for BIRD [exists] to accelerate revenue growth to 28% in 2022 estimated from 24% in 2021 estimates,” said Morgan Stanley retail analyst Kimberly Greenberger in a note on Thursday.
Greenburger updated her rating for the company to overweight (The Buy equivalent). Shares rose almost 7% to $USD4.50 in trading on Thursday. Despite being a newly public company, it has managed to prove itself and has shown strong potential.
“So much exciting things coming out of our company in the coming 12 months. We’ve got the performance side and our lifestyle side, and that’s true now for footwear in particular, but also with apparel. As we go up the body, we’re bringing some of these natural material innovations to bear on incredible second-skin comfort. So this is the most exciting kind of 12 to 24 months of product pipeline that we’ve put out,” Zwillinger added.
Because the company sells sustainable products, Allbirds is required to follow ESG (Environmental, social, and governance) standards. “Allbirds is a distinctive, ESG-driven brand with a potentially long growth runway ahead,” said Greenberger.