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Revenues are a proxy for market share being captured. Should you’re not rising revenues, you’re dropping market share to rivals. Within the case of huge whole addressable markets (TAMs), there could also be sufficient alternative to go round, which implies there needs to be no impediments to rising quick besides inner constraints. So, if the warehouse automation alternative is a $100 billion blue ocean alternative, then why is AutoStore (AUTO OL) seeing income development stall?
Editor’s Observe: All numbers on this article are USD except acknowledged in any other case.
AutoStore’s Income Progress
Double-digit income development is nothing to sneeze at, however slowing from 78% development in 2022 to 11% in 2023 is a dramatic decline. The CEO’s letter describes their progress in 2023 as “considerably outpacing the sunshine AS/RS warehouse automation market, which declined 16 p.c,” in keeping with a “top-tier administration consulting agency.” With solely round 20 p.c of the market penetrated, there may be loads of alternative left to seize with $6.5 billion in pipeline orders. When efficiently transformed, these change into “backlog” which stands at $447 million which is an effective begin to 2024. That every one sounds good on paper, however as we’ve stated earlier than, the one floor reality is income development. So, when AutoStore determined to cease offering steerage, analysts turned understandably involved.
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