Allbirds decided to focus on online shopping and partner distribution programs, keeping two outlet stores in the US and two of its own stores in London / Photo: Facebook / Allbirds
Jennifer Lopez, Lady Gaga, Sarah Jessica Parker - the list of celebrities who have been spotted wearing Allbirds eco-friendly sneakers could decorate a Hollywood party. However, popularity among the stars has not yet brought the company financial stability: it continues to operate at a loss. Now Allbirds shares are trading at about $3 - five times lower than the IPO price. But Allbirds is not giving up: the company is expanding its line of shoes, introducing new eco-materials, and betting on online sales, closing full-size retail stores. Wall Street believes the company's stock could rise as much as 170% in the long run.
Sheep, birds and stars: what makes Allbirds interesting
Footwear and apparel manufacturer Allbirds, with a market capitalization of about $25 million, is now based in San Francisco, although the brand's history began in New Zealand. The company was co-founded by former soccer player Timothy Brown, who is now on the board of directors. Even during his sports career, he dreamed of creating comfortable yet eco-friendly shoes, and in 2014 he began to realize this idea. From the very beginning, the focus was on sustainable production: the main material chosen for the sports shoes is wool, a symbol of New Zealand, known for its sheep breeding traditions. The name of the brand also refers to the historical homeland - an island famous for its rich world of birds. In 2016, Allbirds released its first sneaker model.
In Silicon Valley, laconic wool shoes have become part of the informal dress code, Business Insider wrote. Media noted that Allbirds were worn by Google co-founder Larry Page and former Twitter head Dick Costolo. Actor Stanley Tucci admitted to"being an Allbirds fan for years." Minimalist design, eucalyptus wood fiber, sugar cane, responsible wool suppliers, and minimal impact on nature have all made the company's shoes appealing at a time when the environmental agenda is particularly popular. In 2018, Allbirds was financially backed by Leonardo DiCaprio, known for his attention to environmental issues. "I'm proud to join the company as an investor," he told People. On the wave of popularity, the company gradually expanded the line of sneaker models, started producing clothes, jackets, underwear made of wool and eucalyptus fiber.
The company has raised several rounds of venture capital funding totaling $255 million. In November 2021, Allbirds had an IPO, selling more than 23.2 million shares at $15 per joke. They are now worth 80% less at about $3 per share.
What went wrong
Despite the expansion and focus on scaling the business, Allbirds' revenue actually started to fall in 2022, perhaps under the pressure of being a publicly traded company that is expected to demonstrate consistent growth, Forbes wrote. The brand opened dozens of stores in city centers as well as expanded its assortment by adding related apparel categories that have not resonated with Allbirds' consumers. For the third quarter of 2022, the company reported a net loss of $25.2 million - an 82% increase from the same quarter a year earlier.
Allbirds tried to turn the situation around: at the end of 2022, the company announced the discontinuation of an entire product line, and in March 2024 it updated its strategic plan. In 2024, the company admitted: "We have incurred significant net losses since inception and expect to continue to be unprofitable for the foreseeable future.
However, in 2024, the net loss narrowed 39% year-on-year to $93.3 million, with the company cautioning that even if it does reach profitability, it may be difficult to maintain or grow it. "Our focus on using sustainable, high-quality materials and environmentally friendly manufacturing processes and practices may increase product costs and constrain revenue growth," Allbirds noted. Being environmentally friendly and having a low carbon footprint requires higher costs - and it's not just the company that has to pay the price, but also its investors.
Allbirds reported a net loss of $20.3 million for the third quarter of 2025, down 4.25% from a year earlier. The loss per share reached $2.49. The company warned that going forward it expects revenue to decline by about $23 million to $25 million due to the transition from a direct sales model to a distribution model in a number of international markets, as well as the closure of a portion of Allbirds' U.S. stores. Allbirds announced in late January that it intends to focus on online sales and partner distribution programs. Only two Allbirds outlet stores will remain in the US, as well as two of its own stores in London.
What the analysts are saying
"Third-quarter 2025 financial results are in line with management's forecast and our expectations, with margins slightly above the market consensus forecast," Maxim group analyst Tom Forte wrote in a November report (available from Oninvest). Despite a 23.3% year-on-year revenue decline, the analyst noted that the new product lines have exceeded sales expectations and are helping to restore the brand's momentum.
Maxim group has lowered its revenue forecast for Allbirds by 3.2% for 2026. Maxim group estimates that in 2026, Allbirds will focus on revitalizing its wholesale sales channels. Tom Forte believes that the company is successfully implementing a multi-year restructuring program and creating a business model capable of delivering sustainable and profitable growth amid brand strength. Maxim group's target price for the company's shares is $14, which implies a potential upside of almost five times.
In a report dated November 25, 2025 (available on Oninvest), Morgan Stanley reported Allbirds coverage with a final rating of "hold". The bank's analyst Alex Straton set a final target price of $8 per share. He said that despite notable progress on its transformation strategy, the company's fundamentals remain weak and volatile. This is evidenced, in particular, by repeated downgrades of sales forecasts during the year and the continued risks of their decline in the fourth quarter.
Morgan Stanley's target price includes average annual revenue growth of about 5% and the company achieving positive adjusted EBITDA by 2029.
Allbirds has three ratings from analysts on Marketwatch, all with "hold". The average target price is $8, with a potential upside of 170% to the closing price on February 13.
