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Oatly Group (OTLY)
NASDAQ:OTLY
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Oatly Group
(NASDAQ:OTLY)
Rating:53Neutral
Price Target:
$13.00
▲(7.71%Upside)
Positive Factors
Financial Guidance
Guidance for positive FY25 EBITDA is the first major inflection and likely to be followed by FCF turning positive in FY26.
Market Performance
Absolute sales growth remains superior to U.S. packaged food peers, indicating strong market performance.
Operational Efficiency
Analyst views the guidance for FY25 as a net positive, including tighter operational expenses and moderated free cash flow burn.
Negative Factors
Financial Performance
Return on Equity TTM is significantly negative at -92.07%.
Growth Prospects
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.
Regional Sales Challenges
Europe & International segment sales miss expectations despite an EBITDA beat, suggesting regional challenges.
Oatly Group (OTLY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$372.30M
Dividend YieldN/A
Average Volume (3M)131.68K
Price to Earnings (P/E)―
Beta (1Y)2.00
Revenue Growth4.56%
EPS Growth57.03%
CountryUS
Employees1,468
SectorConsumer Defensive
Sector Strength63
IndustryBeverages - Non-Alcoholic
Share Statistics
EPS (TTM)-0.51
Shares Outstanding29,927,992
10 Day Avg. Volume143,549
30 Day Avg. Volume131,684
Financial Highlights & Ratios
PEG Ratio-0.76
Price to Book (P/B)26.04
Price to Sales (P/S)0.00
P/FCF Ratio-43.36
Enterprise Value/Market Cap55.52
Enterprise Value/Revenue6.36
Enterprise Value/Gross Profit84.40
Enterprise Value/Ebitda-31.09
Forecast
1Y Price Target
$14.33Price Target Upside18.72% Upside
Rating ConsensusStrong 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 Earnings Call Summary
Earnings Call Date:Apr 30, 2025
(Q1-2025)
| % Change Since: 17.41%|
Next Earnings Date:Jul 24, 2025
Earnings Call Sentiment Neutral
The earnings call reflected significant improvements in cost efficiencies and gross margin expansion, as well as strong volume growth in key regions like Greater China. However, the top-line revenue growth was modest, and the company faced challenges in North America, impacting overall performance. While there are positive signs of progress, particularly in profitability and operational efficiency, the mixed revenue performance and regional challenges create a balanced outlook.Q1-2025 Updates
Positive Updates
Improvement in Gross Margin and Adjusted EBITDA
Gross margin expanded by 450 basis points year-over-year to 31.6%, and adjusted EBITDA improved by $9.5 million compared to last year's first quarter, marking the best quarterly results as a public company.
Strong Volume Growth
Volume grew a solid 9.2% in the quarter, with notable strength in the Greater China segment and solid growth in Europe and International markets.
Cost Efficiency Gains
Significant cost reductions achieved, reducing cost of goods sold per liter by 15% year-on-year. Total cost of goods was reduced by $10 million.
Progress in Greater China
The Greater China segment showed strong performance, particularly in the foodservice channel, and the retail channel is starting to gain traction.
Cash Flow Improvement
Free cash flow was positive at $21 million, the best quarterly performance as a public company and a $25 million improvement compared to last year's first quarter.
Negative Updates
Mixed Top-Line Performance
Constant-currency revenue growth was only 0.7% in the quarter, with headwinds in North America due to issues with the largest customer and SKU rationalization.
Challenges in North America
Continued challenges in North America with discrete headwinds impacting sales, including a change in sourcing strategy at the largest customer and SKU rationalization.
Price Mix Decline
Price mix declined by 8.5%, offsetting some of the volume growth achieved in the quarter.
Company Guidance
During the Oatly First Quarter 2025 Earnings Conference Call, management reinforced their guidance for the year, emphasizing their commitment to structural, consistent, profitable growth. They reported a strong first quarter with gross profit, gross margin, adjusted EBITDA, and free cash flow all reaching their highest levels since the IPO. The quarter saw a 9.2% increase in volume, with particularly strong growth in Greater China, but constant-currency revenue growth was modest at 0.7%. Despite facing challenges in North America, the company remains optimistic about accelerating growth later in the year. Oatly continues to pursue cost efficiencies, reducing cost of goods sold per liter by 15% year-on-year, which contributed to a 450 basis point improvement in gross margin to 31.6%. Their full year guidance, projecting constant-currency growth of 2% to 4% and adjusted EBITDA between $5 million to $15 million, remains unchanged.Oatly Group Financial Statement Overview
Summary
Oatly Group shows steady revenue growth and improving gross profit margins but struggles with profitability, reflected in persistent net losses, negative margins, a high debt-to-equity ratio, and negative cash flows.Income Statement
Oatly Group has experienced modest revenue growth over the years, with a recent decline in TTM figures. Gross profit margins have improved, but the company continues to face significant net losses, reflected in negative EBIT and EBITDA margins. The net profit margin remains negative, indicating ongoing profitability challenges.45
Neutral
Balance Sheet
The balance sheet shows a high debt-to-equity ratio, signaling substantial leverage. However, the equity ratio has improved recently, suggesting better asset management. Return on equity is negative due to persistent net losses, highlighting profitability concerns.50
Neutral
Cash Flow
Oatly's cash flow analysis reveals negative operating and free cash flows, exacerbating concerns about cash management. Although the free cash flow has shown some improvement recently, the operating cash flow to net income ratio remains unfavorable.40
Negative
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 822.04M | 823.67M | 783.35M | 722.24M | 643.19M | 421.35M | Gross Profit |
| 244.92M | 236.49M | 152.08M | 80.03M | 155.01M | 129.24M | EBIT |
| -176.33M | -186.15M | -457.01M | -395.99M | -213.74M | -47.09M | EBITDA |
| -28.24M | -86.13M | -287.79M | -335.15M | -172.15M | -32.96M | Net Income Common Stockholders |
| -168.58M | -201.95M | -416.87M | -392.57M | -212.39M | -60.36M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 74.43M | 98.92M | 249.30M | 82.64M | 545.51M | 105.36M | Total Assets |
| 793.02M | 803.98M | 1.12B | 1.23B | 1.63B | 678.93M | Total Debt |
| 475.93M | 491.45M | 532.84M | 151.70M | 149.21M | 233.45M | Net Debt |
| 401.50M | 392.53M | 283.54M | 69.05M | -146.37M | 128.09M | Total Liabilities |
| 671.14M | 697.86M | 781.19M | 434.05M | 383.61M | 352.84M | Stockholders Equity |
| 120.55M | 104.69M | 333.99M | 791.14M | 1.25B | 326.09M |
| Cash Flow | Free Cash Flow | ||||
| -130.86M | -155.62M | -234.67M | -475.11M | -495.43M | -186.04M | Operating Cash Flow |
| -88.91M | -114.43M | -165.63M | -268.95M | -213.83M | -44.31M | Investing Cash Flow |
| -23.71M | -9.25M | -26.70M | 34.79M | -544.33M | -141.37M | Financing Cash Flow |
| -23.63M | -27.29M | 355.00M | 35.92M | 955.80M | 273.91M |
Oatly Group Technical Analysis
Positive
12.07
Price Trends
10.11
Positive
10.19
Positive
12.87
Negative
Market Momentum
0.59
Negative
62.11
Neutral
75.24
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OTLY, the sentiment is Positive. The current price of 12.07 is above the 20-day moving average (MA) of 10.89, above the 50-day MA of 10.11, and below the 200-day MA of 12.87, indicating a neutral trend. The MACD of 0.59 indicates Negative momentum. The RSI at 62.11 is Neutral, neither overbought nor oversold. The STOCH value of 75.24 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (65)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $3.51B | 12.59 | 23.07% | 4.20% | 13.22% | 11.37% | |
77 Outperform | $4.34B | 23.11 | 40.81% | ― | 0.34% | 9.48% | |
76 Outperform | $1.89B | 32.60 | 24.86% | ― | 8.01% | 11.26% | |
65 Neutral | $8.92B | 15.03 | 4.68% | 6.11% | 3.59% | -2.49% | |
54 Neutral | $189.26M | ― | -28.87% | ― | -6.83% | 19.09% | |
53 Neutral | $372.30M | ― | -85.68% | ― | 4.56% | 57.03% | |
39 Underperform | $47.20M | ― | -117.82% | ― | 22.04% | -21.72% |
* Consumer Defensive Sector Average
Performance Comparison
OTLY
Oatly Group
12.07
-6.98
-36.64%
AKO.A
Embotelladora Andina SA
19.57
6.19
46.26%
FIZZ
National Beverage
45.84
1.15
2.57%
BRFH
Barfresh Food Group
2.97
0.78
35.62%
ZVIA
Zevia PBC
2.52
1.71
211.11%
COCO
Vita Coco Company
33.19
2.89
9.54%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.