Oatly is one of the fastest-growing companies in the coffee market and a potential investment opportunity. The company recently announced plans to expand production by 50% in its Utah manufacturing plant. The company is also pursuing multiple expansion initiatives and claims to have its Maanshan plant in China on track to launch in the second half of 2021. However, this company is not for everyone and comes with a lot of risk.
The stock is currently priced 45% below its book value. The company’s management overestimated the oat milk market and overinvested in expansion, which will eventually weigh on margins and force them to reduce capacity. The company also produces yogurt, ice cream, and spreads and operates worldwide.
Oatly recently released quarterly results, and its guidance for next year was moderately positive. Revenue will grow by 37% to 43% and the company expects to hit 900 million liters of production by the end of the year. The company did not specify how much of this capacity will be internally produced, but it does plan to issue new shares and take on debt to meet this goal.
The company’s sustainability efforts have earned it a reputation for being one of the most environmentally-conscious companies in the world. It has used its advertising to promote its efforts to reduce greenhouse gas emissions, improve water conservation, and protect rainforests. Oatly’s marketing campaign also connects with consumers outside the vegan community. The company’s pre-IPO investors include Oprah Winfrey and Jay-Z.
