Oatly Group’s Q2 Revenues Miss Estimates, EBITDA Loss Widens

Oatly Group (OTLY) reported record Q2 revenue but fell short of Wall Street expectations. The adjusted EBITDA loss also widened. Shares of the oat drink company were down 2.61% at the close on Monday.

Revenue increased 53.3% year-over-year to $146.2 million, driven by additional supply from existing production facilities that allowed the company to meet growing demand. However, the Street was expecting revenue of $147.21 million. Notably, revenue could have been much higher had the company not been affected by the COVID-19 pandemic and start-up-related manufacturing delays that impacted sales by about $12 million to $14 million.

Additionally, the adjusted EBITDA loss widened to $31.9 million compared to a loss of $1.2 million delivered in the same quarter last year. The increase was due to higher employee and operating expenses as the company scaled its operations to support growth across various markets. (See Oatly stock charts on TipRanks)

According to Oatly CEO Toni Petersson, 2021 is a transformational year for Oatly, as the company will go public in May 2022. The company now has sufficient capital to enhance its production capacity and scale its business across three continents, he added.

Petersson stated, “Our new and existing production capacity gives us confidence in our ability to achieve an accelerated revenue growth rate in the second half of this year, while also extending our core values and mission for a more sustainable food system.”

For the full year, Oatly is projecting revenue to exceed $690 million, representing a 64% year-over-year increase. It also expects capital expenditure at the lower end of the $350 million to $400 million range.

Jefferies analyst Rob Dickerson has reiterated a Buy rating on the stock with a $34 price target, implying 106.94% upside potential to current levels.

According to Dickerson, Oatly continues to register distribution wins in Asia and the Americas, having also entered Switzerland and Ireland.

Dickerson commented, “Demand continues to outstrip supply. New capacity additions announced. June/July showed nice increase in production volumes. FY’21 sales guidance of >$690mm vs. $687mm consensus, so slightly ahead.”

Consensus among analysts is a Moderate Buy based on 7 Buys and 6 Holds. The average Oatly Group price target of $29.70 implies 80.77% upside potential to current levels.