Last week, Bird Global, Inc. (BRDS) announced new and expanded programs around Europe, the U.S., and Canada, which showcase the company’s commitment to city partners, understanding of local transportation needs, and investment in innovative technology. The company expects tens of millions of rides across its global footprint in the coming months.
BRDS currently has a trading volume of 34.54 million, while its average volume is 14.51 million. This drastic change in its trading volume indicates a significant increase in investors’ interest in the company’s stock.
However, the company’s near-term prospects look grim. And in this article, I will discuss why this EV stock is not worth adding to your portfolios.
Following the news, shares of the EV mobility company have popped 34.2% over the past five days, closing the last trading session at $0.26. However, they have slumped 89.2% over the past year and 36.6% over the past nine months.
Here’s what could shape BRDS’ performance in the near term:
Poor Financials
During the fiscal year that ended December 31, 2022, BRDS’s product sales declined 25.2% year-over-year to $13.33 million. Its total operating expenses rose 96.2% year-over-year to $506.06 million, while its loss from operation increased 100.4% year-over-year to $471.36 million. Also, its net loss rose 66.9% year-over-year to $358.74 million.
Moreover, during the fiscal fourth quarter that ended December 31, 2023, BRDS’ product sales declined 93.7% year-over-year to $564 thousand. Its loss from operations amounted to $29.10 million, and its net loss amounted to $36.41 million.
Poor Profitability
BRDS’s trailing-12-month negative EBIT and EBITDA margin of 104.44% and 103.53% are significantly lower than the industry averages of 9.72% and 13.29%. Its trailing-12-month negative net income and levered FCF margin of 146.63% and 8.48% are lower than the 6.49% and 3.85% industry average.
Additionally, its trailing-12-month negative ROCE, ROTC, and ROTA of 219.52%, 69.61%, and 158.98% are remarkably lower than the industry averages of 13.67%, 6.96%, and 5.16%, respectively.
POWR Ratings Reflect Bleak Outlook
BRDS has an overall rating of F, translating to a Strong Sell in our proprietary POWR Ratings system. The POWR Ratings are calculated considering 118 distinct factors, with each factor weighted to an optimal degree.
The stock has an F grade for Quality, consistent with its negative profit margins.
It is graded a D for Growth, in sync with its weak financial performance in the latest quarter. Its D grade in Stability is justified by its 60-month beta of 2.25.
Among the 88 stocks in the Industrial – Services industry, BRDS is ranked #84.
In addition to the grades stated above, BRDS’ grades for Growth, Value, and Sentiment can be accessed here.
Bottom Line
While the stock has been gaining traction lately, it is down more than 85% over the past year and is currently trading below its 200-day moving average of $0.33.
Also, given its poor fundamentals, the momentum might not sustain. So, it might be ideal to avoid the stock.
Stocks to Consider Instead of Bird Global, Inc. (BRDS)
Unfortunately, the odds of BRDS outperforming in the weeks and months ahead are greatly compromised. However, there are many good stocks in the industrial-Services industry with impressive POWR Ratings. So, consider these three A-rated (Strong Buy) stocks instead:
Koç Holding A.S. (KHOLY)
Limbach Holdings, Inc. (LMB)
EMCOR Group, Inc. (EME)
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BRDS shares fell $0.26 (-100.00%) in premarket trading Tuesday. Year-to-date, BRDS has gained 44.28%, versus a 7.87% rise in the benchmark S&P 500 index during the same period.
About the Author: Kritika Sarmah
Her interest in risky instruments and passion for writing made Kritika an analyst and financial journalist. She earned her bachelor's degree in commerce and is currently pursuing the CFA program. With her fundamental approach, she aims to help investors identify untapped investment opportunities.
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