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Latest Sneaker IPO Reports As Analysts Praise Sustainability Focus

Sneaker-maker and recent IPO Allbirds (BIRD) reports third-quarter earnings after the close on Tuesday. Allbirds stock traded lower on Monday.

The San Francisco-based company, which designs footwear aimed at more environmentally-conscious customers, reports as the shoe manufacturing industry attempts to find its way around pandemic-related supply-chain disruptions.

Allbirds Earnings

Estimates: Wall Street expects Allbirds to lose 11 cents per share during the quarter, according to FactSet. Revenue is expected to be $62 million.

Results: Due after the close on Tuesday.

Allbirds Stock

Allbirds stock fell 4.7% to 18.82 in the stock market today. That’s an all-time closing low, but still above early November IPO price of $15.

Shares have a very weak Composite Rating of 22.

Along with Allbirds stock, Nike (NKE) rose 1.1% to 169.87. Shares were trying to clear a 174.48 buy point of a cup base.

Adidas (ADDYY) edged up 0.3%. Crocs (CROX) shook off early losses and tilted 0.3% higher. Skechers (SKX) also reversed higher, trading up 1.1%.

On Holding (ONON), the running-shoe maker backed by tennis star Roger Federer, fell 2%. That company, another recent IPO, reported earnings earlier this month.

Allbirds, founded in 2015, is best known for its Wool Runner shoes. The company has tried to position itself as a more sustainable shoemaker, making products from tree fiber, sugar cane, crab shells and other materials. In doing so, it hopes to capture younger consumers who pay more attention to how and where their products are made.

Still, in the Allbirds stock IPO prospectus, the company noted that its footwear is largely made by a handful of vendors in Korea and Vietnam. Shutdowns in Vietnam earlier this year have hit sales for Nike, as well as quarterly results for Crocs. Factories in Vietnam have since reopened, but are hindered by labor shortages.

Allbirds also said that finding suppliers that meet its environmental standards can be an “involved process.”

Analysts Like Allbirds Stock

Analysts have expressed optimism on Allbirds stock, even as footwear and clothing manufacturers navigate Covid restrictions abroad and backups along the supply chain.

“Allbirds is a leading footwear company with a unique competitive moat given its focus on sustainability,” BofA analysts said in a research note on Monday in initiating coverage on Allbirds.

They gave Allbirds stock a buy rating and a $23 price objective.

“With an aided brand awareness of only 11% in the US, we see opportunity for its innovative, sustainable product development to capture market share in the $1.8 (trillion) global athletic footwear and apparel market,” the analysts continued.

William Blair analysts also found a lot to like. An initiation note on Allbirds stock on Monday gave the stock an outperform rating, and noted Allbirds’ high rate of repeat customers. Blair analysts described Allbirds as a company that draws most of its sales from digital channels, with potential to gain from the opening of more physical retail stores.

“The opening of stores is expected to drive new customer acquisition while also lifting digital sales and translating to improved lifetime value,” they said.

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