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Berkshire Grey: Potential Sector Protagonist In AI Robotics

Nov. 02, 2021 4:14 PM ETSoftBank Group Corp. (SFTBF)25 Comments


  • Berkshire Grey is trading ~40% lower than the initial IPO valuation.
  • Top names are involved as investors, customers, or partners.
  • There are proprietary solutions and a holistic approach from Berkshire Grey's competitive advantage.
  • Large TAM and sector potential constitute a large pool for future revenue.
  • The presence of high-quality leadership and personnel can lead to success.

Manager Technician Industrial Engineer working and control robotics with monitoring system software and icon industry network connection on tablet. AI, Artificial Intelligence, Automation robot arm machine in smart factory on blue digital background, Inno

ipopba/iStock via Getty Images

Investment Thesis

Currently trading ~40% lower vs. the initial IPO valuation, Berkshire Grey (BGRY) presents an opportunity for investors to initiate a long-term position at the current levels with a view to 2025.

Considering the accelerating

This article was written by

Economist. In my free time, I like studying innovative companies. I have fun while doing this, yet, I consider it a serious activity.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of BGRY either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (25)

Thank you for your article!
CPA Bob profile picture
Time for an update? Almost 70% below its IPO valuation price. If it was a good buy at $6.50, it must be a ____ buy at $3.25.
Innovation Sustainability Growth profile picture
@CPA Bob Market and macro trends have changed. Unfortunately, tech-growth stocks are among the biggest losers. Truth be told, valuations were pretty pumped a year ago. To make sure if something has changed about Berkshire Grey, though, we should wait for FY 2021 ER and 2022 guidance. In any case, it's a long-term play and one I still believe will lead the supply-chain robotics disruption.

Regarding strategy, when I am convinced about my position, I usually average down once or twice. In the meantime, if a sudden pump happens, especially not based on important news, I sell a percentage for profit.
CPA Bob profile picture
@Innovation Sustainability Growth Revenue should be around $23 million in Q4 per the Company's statement. I'm also interested to hear what the Company expects for FY 2022.
Now they are even more attractive...
Cambridge STR profile picture
I am buying more BGRY shares. The AI hype from early 2021 has eased. Yet, companies like BGRY are continuing to execute successfully. I'm also buying ABSI, AI, and ROOT as they also have similar success stories.
Does this company have any recurring revenue from
it’s customers ?
Innovation Sustainability Growth profile picture
@i_orion They mention additional $25M orders from an anchor customer and ongoing follow-on orders in the Q3 earnings presentation.


You can also check the Q3 earnings call transcript where Mark Fidler mentionts "approximately 85% of our backlog consists of anchor customers and 85% of our orders so far this year represent follow-on orders from anchor customers as well".

@author - what's your view on Symbotic? I'm trying to find a differentiation between Symbotic, Berkshire, Ocado, and Autostore... On Symbotic mgmt presentation they claim to be a "game changer" while Ocado, Autostore are partial automation.
@unan2010 I‘d be interested in this too.SoftBank seems to have its hands in many of the plays in this sector.Hedging it’s bets?

I do know Ocado was one of the heaviest shorted stocks in the FTSE index for years and has had a great run for the last few years.I wish I had bought some back then and tried out their food delivery service earlier.
@nlondon22 It seems Ocado has limited customer base / TAM as there are only a few large grocery chains globally that need these large warehouses.
Innovation Sustainability Growth profile picture
@unan2010 At first glance, looking through the filing www.sec.gov/... , I like Symbotic. They seem to present a solid system, growth potential, an important contracted backlog, they have Softbank and Walmart involved, and the sector will be hot for the coming years. However, Symbotic will be richly valued at a $4.8B pro-forma EV in my opinion, contrary to Berkshire Grey's current market cap. Concerning competition, we cannot say that Symbotic and Berkshire Grey are direct competitors. Symbotic focuses on managing pallets and larger cases currently, for instance. They could even "work together" for a large corporation. Finally, I am intrigued by the possibility of M&A through the sector, involving both start-ups and large players.
Like the story, still overvalued
bluescorpion0 profile picture
would another competitor be the cobots of Teradyne?
Innovation Sustainability Growth profile picture
@scorpion.north Mainly Mobile Industrial Robots or AutoGuide (Teradyne subsidiaries) could partially be considered as competitors in the field of mobility robotics.
@Innovation Sustainability Growth Interesting find.I only happened to find this company through a 'what others are invested in box' on here.What about autostore recently listed on the norwegian exchange i believe at a rather lofty valuation comparatively.Would you say they are offering a similar proposition and what do you think of them?They listed at circa. $12 billion.Software bought a 40% equity stake in them this April.

Do you see amazon as a threat potentially scooping up alot of the automation, logistics business from other businesses?How does berkshire differentiate itself?I must admit at this marketcap i am tempted.
Innovation Sustainability Growth profile picture
@nlondon22 AutoStore offers a part of what Berkshire Grey does (with the cubic storage specialization). I like Norwegian companies in general, yet I'd agree that the current valuation is indeed lofty. It is a more mature company than Berkshire Grey though.

The competitive advantage that distinguishes Berkshire Grey is the holistic approach (hardware, software, and services) which leads to a fully automated warehouse environment. This will prove crucial in my opinion, as most of the competitors offer parts of what Berkshire Grey does.

Softbank invests in various robotic start-ups and is among the sector movers. Amazon is a sector mover too that started developing the robotics business to solve matters of the core business. We could only speculate about Amazon's intentions. All in all, I'd expect M&A news in the future as the sector is fragmented and large corporations are actively involved.
SasquatchSuperViking profile picture
...big believer, excited to be invested here 💯
Thanks for sharing your perspective on BGRY. I like the story and recently established a starter position in the low sixes. I plan to keep a close eye on the stock and double down as soon as the market shows more interest. Good luck to all!
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