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Oatly Group Ab (OTLY)
:OTLY
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Oatly Group
(NASDAQ:OTLY)
49Neutral
Positive Factors
EBITDA and Cash Flow
Q3's EBITDA upside reflected increasing benefits from supply chain efficiency and product mix.
Market Performance
Absolute sales growth remains superior to U.S. packaged food peers, indicating strong market performance.
Negative Factors
Future Cash Flows
The net present value of expected future cash flows is now lower than the previous estimate.
Regional Sales
Europe & International segment sales miss expectations despite an EBITDA beat, suggesting regional challenges.
Sales Growth
More modest growth prospects of the plant-based milk category and oat milk have led to adjusted assumptions for net sales growth and the expected pace of EBIT margin expansion.
Oatly Group (OTLY) vs. S&P 500 (SPY)
Market Cap
$296.29M
Dividend YieldN/A
Average Volume (3M)280.28K
Price to Earnings (P/E)―
Beta (1Y)2.61
Revenue Growth4.71%
EPS Growth52.27%
CountryUS
Employees1,482
SectorConsumer Defensive
Sector Strength73
IndustryBeverages - Non-Alcoholic
Share Statistics
EPS (TTM)-6.74
Shares Outstanding29,927,992
10 Day Avg. Volume105,097
30 Day Avg. Volume280,281
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.38
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$17.04Price Target Upside72.12% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
Oatly Group Business Overview & Revenue Model
Company DescriptionOatly Group AB, an oatmilk company, provides a range of plant-based dairy products made from oats in Sweden. It offers Barista edition oatmilk, oatgurts, frozen desserts, ice-creams, and yogurts; ready-to-go drinks, such as cold brew latte, mocha latte, matcha latte, and mini oat drink in original and chocolate flavors; and cooking products, including Cooking Cream, in regular and organic, Crème Fraiche, Whipping Cream, Vanilla Custard and Spreads in a variety of flavors. The company was formerly known as Havre Global AB and changed its name to Oatly Group AB in March 2021. The company was founded in 1994 and is headquartered in Malmö, Sweden.
How the Company Makes MoneyOatly Group generates revenue primarily through the sale of its oat-based products to various customer segments, including retailers, foodservice providers, and direct consumers. The company's key revenue streams include wholesale distribution to grocery stores and supermarkets, partnerships with cafes and restaurants for on-premise consumption, and online sales through e-commerce platforms. Oatly's revenue is driven by the growing demand for plant-based foods as consumers increasingly seek sustainable and health-conscious options. The company also leverages strategic partnerships and collaborations with influential brands and retailers to expand its market reach and enhance brand visibility, which further contributes to its earnings.
Oatly Group Financial Statement Overview
Summary
Oatly Group shows moderate revenue growth but struggles significantly with profitability and cash flow. High debt levels and negative equity returns highlight financial instability, necessitating operational improvements and debt reduction.Income Statement
Oatly Group's TTM revenue grew by 3.97% compared to the previous year, indicating a moderate growth trajectory. However, the company struggles with profitability, as evidenced by a negative net profit margin of -50.61% and negative EBIT and EBITDA margins. The gross profit margin is 27.36%, which shows some ability to cover production costs but is offset by high operating expenses and losses.45
Neutral
Balance Sheet
The company's balance sheet reflects a high debt-to-equity ratio of 2.14, indicating significant leverage and potential risk if cash flows do not improve. The equity ratio is 24.93%, suggesting that a quarter of the assets are funded by equity, which is relatively low. Oatly's return on equity is negative at -179.56%, highlighting continued challenges in generating shareholder returns.40
Negative
Cash Flow
Oatly's cash flow situation is concerning with negative free cash flow of -$165 million in the TTM period. The operating cash flow to net income ratio of 0.29 indicates that the company is not efficiently converting its income into cash. The free cash flow to net income ratio is 0.40, further indicating struggles in generating positive cash flows.38
Negative
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 814.48M | 783.35M | 722.24M | 643.19M | 421.35M | 204.05M | Gross Profit |
| 222.85M | 152.08M | 80.03M | 155.01M | 129.24M | 66.58M | EBIT |
| -135.61M | -457.01M | -395.99M | -213.74M | -47.09M | -30.76M | EBITDA |
| -290.98M | -287.79M | -355.03M | -172.15M | -34.33M | -23.73M | Net Income Common Stockholders |
| -412.27M | -416.87M | -392.57M | -212.39M | -60.36M | -35.63M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 10.57M | 249.30M | 82.64M | 545.51M | 105.36M | 10.57M | Total Assets |
| 0.00 | 1.12B | 1.23B | 1.63B | 678.93M | 349.22M | Total Debt |
| 0.00 | 532.84M | 151.70M | 149.21M | 233.45M | 102.59M | Net Debt |
| 10.57M | 283.54M | 69.05M | -146.37M | 128.09M | 92.02M | Total Liabilities |
| 0.00 | 781.19M | 434.05M | 383.61M | 352.84M | 161.42M | Stockholders Equity |
| 187.80M | 333.99M | 791.14M | 1.25B | 326.09M | 187.80M |
| Cash Flow | Free Cash Flow | ||||
| -165.08M | -234.67M | -475.11M | -495.43M | -186.04M | -95.68M | Operating Cash Flow |
| -118.87M | -165.63M | -268.95M | -213.83M | -44.31M | -39.12M | Investing Cash Flow |
| -20.93M | -26.70M | 34.79M | -544.33M | -141.37M | -64.69M | Financing Cash Flow |
| -29.49M | 355.00M | 35.92M | 955.80M | 273.91M | 95.54M |
Oatly Group Technical Analysis
Neutral
9.90
Price Trends
10.34
Negative
12.08
Negative
15.18
Negative
Market Momentum
>-0.01
Negative
52.63
Neutral
74.58
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OTLY, the sentiment is Neutral. The current price of 9.9 is above the 20-day moving average (MA) of 9.29, below the 50-day MA of 10.34, and below the 200-day MA of 15.18, indicating a neutral trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 52.63 is Neutral, neither overbought nor oversold. The STOCH value of 74.58 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for OTLY.
Oatly Group Risk Analysis
Oatly Group disclosed 75 risk factors in its most recent earnings report. Oatly Group reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Oatly Group Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $204.72B | 21.48 | 52.42% | 3.57% | 0.42% | 5.77% | |
73 Outperform | $28.47B | 21.25 | 38.65% | 2.74% | -16.16% | 41.01% | |
62 Neutral | $20.67B | 14.36 | -12.41% | 3.14% | 1.24% | 2.53% | |
52 Neutral | $851.50M | 279.33 | 0.27% | 2.80% | -1.23% | ― | |
49 Neutral | $296.29M | ― | -91.64% | ― | 4.71% | 52.27% | |
39 Underperform | $40.03M | ― | 31.02% | ― | -11.65% | -174.54% | |
29 Underperform | $239.05M | ― | 44.21% | ― | -4.93% | 53.78% |
* Consumer Defensive Sector Average
Performance Comparison
OTLY
Oatly Group
9.90
-12.50
-55.80%
K
Kellanova
82.47
27.12
49.00%
PEP
PepsiCo
149.27
-18.14
-10.84%
WW
WW International
0.50
-1.27
-71.75%
BYND
Beyond Meat
3.14
-4.62
-59.54%
DNUT
Krispy Kreme
5.00
-9.98
-66.62%
Oatly Group Earnings Call Summary
Earnings Call Date: Feb 12, 2025 | % Change Since: -15.31% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a company that is making significant strides in improving profitability and operational efficiency, with strong volume growth and gross margin expansion. However, challenges remain in terms of meeting revenue growth expectations and addressing category sluggishness, particularly in the U.S. and China.Highlights
Volume Growth and Profitability
Oatly reported a robust volume growth of 8.8% in 2024 compared to 2023. Despite falling short of topline guidance, adjusted EBITDA was at the favorable end of the guidance range, highlighting improved profitability.
Gross Margin Expansion
Gross margin expanded by 18 percentage points compared to the previous year, driven by supply chain improvements and better cost management.
Expansion in Food Service
North America reported double-digit revenue growth in retail, and food service sales grew by 22% excluding the largest customer, indicating aggressive diversification.
Free Cash Flow Improvement
Oatly reported a significant improvement in free cash flow, with a $319 million improvement since 2022, marking the best performance since the IPO.
Efficiency and Cost Reduction
The company reduced its employee count by 500 over two years and achieved a 19% reduction in cost per liter, reflecting strong efficiency drives.
Lowlights
Revenue Growth Below Guidance
2024 topline results came in below guidance at 4.8% constant currency revenue growth, affected by sluggish category growth.
Impact of Sourcing Changes
Revenue growth for 2025 is expected to be impacted by approximately 300 basis points due to a sourcing decision by the largest U.S. customer.
Challenges in China
The construction of the second Chinese facility was discontinued, reflecting challenges in expanding production capabilities in the region.
Category Sluggishness
Oatly noted sluggish growth in the oatmilk category, with challenges in igniting category momentum and converting traditional dairy consumers.
Company Guidance
During Oatly's fourth-quarter 2024 earnings call, the company reported several key metrics and guidance for 2025. Despite achieving an 8.8% volume growth over 2023, Oatly's constant currency revenue growth was 4.8%, falling short of guidance. However, the company delivered adjusted EBITDA at the favorable end of its guidance range. For 2025, Oatly expects constant currency revenue growth between 2% to 4%, with a 300-basis-point impact from changes in sourcing decisions at its largest U.S. customer, potentially adjusting the guidance range to 5% to 7%. The company forecasts adjusted EBITDA of $5 million to $15 million and capital expenditures between $30 million to $35 million. Oatly aims to drive profitable growth by leveraging its brand, enhancing efficiencies, and maintaining a leaner overhead structure with approximately 1,500 employees. The company reported a 14% revenue increase versus 2022, with a gross margin expansion of 18 percentage points and an adjusted EBITDA improvement exceeding $230 million, indicating substantial progress over the past two years.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.