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Advantage Solutions (ADV)
NASDAQ:ADV
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Advantage Solutions
(NASDAQ:ADV)
45Neutral
Positive Factors
Debt Management
Advantage was active in 2024, voluntarily repurchasing ~$158mm of its outstanding debt while also buying back ~$34mm in common stock.
Financial Performance
AEBITDA increased nearly 9% driven by efficiency gains across all three segments as well as good event momentum in Experiential.
Negative Factors
Future Cash Flow Challenges
Working capital timing benefits and lower capex spend this year will likely reverse in 2025, with the company guiding to FCF conversion dropping into the mid-50% range.
Advantage Solutions (ADV) vs. S&P 500 (SPY)
Market Cap
$515.86M
Dividend YieldN/A
Average Volume (3M)386.91K
Price to Earnings (P/E)―
Beta (1Y)1.88
Revenue Growth-15.17%
EPS Growth-567.89%
CountryUS
Employees70,000
SectorCommunication Services
Sector Strength79
IndustryTraditional Media
Share Statistics
EPS (TTM)-1.31
Shares Outstanding321,408,840
10 Day Avg. Volume574,440
30 Day Avg. Volume386,906
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.16
Price to Cash Flow (P/CF)4.30
P/FCF Ratio16.80
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$4.00Price Target Upside150.00% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Advantage Solutions Business Overview & Revenue Model
Company DescriptionAdvantage Solutions (ADV) is a leading provider of outsourced sales and marketing services to consumer goods companies and retailers. The company operates within the sectors of consumer packaged goods (CPG), retail, and foodservice, offering a wide range of services including headquarter sales, retail merchandising, in-store marketing, and digital commerce solutions. Advantage Solutions focuses on enhancing the performance of brands and retailers by driving consumer engagement and optimizing product placement and visibility.
How the Company Makes MoneyAdvantage Solutions generates revenue primarily through service fees charged to its clients, which include CPG manufacturers and retailers. The company earns money by providing outsourced sales and marketing services, which help clients increase their market presence and drive sales. Key revenue streams include fees for retail merchandising, sales representation, marketing services, and digital commerce solutions. Additionally, Advantage Solutions may benefit from performance-based incentives tied to the achievement of specific sales targets or marketing objectives established in client agreements. Strategic partnerships with leading brands and retailers also play a significant role in sustaining and growing the company's revenue.
Advantage Solutions Financial Statement Overview
Summary
Advantage Solutions is facing significant financial difficulties. The income statement reflects a concerning downward trend with declining revenues and negative net income. The balance sheet shows reduced leverage but negative returns on equity, raising concerns about shareholder returns. Cash flow management shows some resilience with positive free cash flow, but operating cash flow challenges persist.Income Statement
Advantage Solutions has faced challenges with declining revenues and negative net income over recent years. Gross profit margin stands at 14.22%, indicating a decline in core profitability. The net profit margin is negative at -9.17%, reflecting consistent losses. Revenue decreased by approximately 15.61% from the previous period, highlighting a concerning downward trend. EBIT and EBITDA margins also suffered, with both being negative, suggesting operational inefficiencies.35
Negative
Balance Sheet
The company's debt-to-equity ratio has improved significantly, standing at 0.02, reflecting reduced leverage risk. However, the return on equity is negative at -43.66%, due to continued net losses, impacting shareholder returns. The equity ratio is 24.09%, suggesting a moderate level of financial stability, despite the declining asset base.45
Neutral
Cash Flow
Free cash flow has decreased but remains positive at $85.26 million, showing some resilience. The operating cash flow to net income ratio is negative, indicating cash flow challenges in covering net losses. However, the company has managed to maintain positive free cash flow to net income ratio, suggesting some efficiency in cash management.50
Neutral
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 3.77B | 3.57B | 4.22B | 4.05B | 3.60B | 3.16B | Gross Profit |
| 387.98M | 507.27M | 564.38M | 556.56M | 638.17M | 604.19M | EBIT |
| 15.27M | -294.98M | 76.19M | 133.12M | 230.05M | 67.01M | EBITDA |
| 130.48M | -38.40M | 301.17M | -1.14B | 469.13M | 277.84M | Net Income Common Stockholders |
| -201.68M | -326.96M | -63.26M | -1.38B | 54.49M | -161.71M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 184.22M | 205.23M | 142.84M | 120.72M | 164.62M | 204.30M | Total Assets |
| 6.01B | 3.11B | 3.78B | 4.26B | 5.85B | 5.78B | Total Debt |
| 3.29B | 13.25M | 1.92B | 2.11B | 2.10B | 2.16B | Net Debt |
| 3.10B | -191.98M | 1.79B | 1.99B | 1.94B | 1.96B | Total Liabilities |
| 4.34B | 2.36B | 2.68B | 3.03B | 3.27B | 3.24B | Stockholders Equity |
| 1.58B | 748.74M | 1.11B | 1.12B | 2.48B | 2.44B |
| Cash Flow | Free Cash Flow | ||||
| 69.32M | 85.26M | 192.72M | 80.80M | 94.82M | 314.78M | Operating Cash Flow |
| 136.29M | 93.09M | 239.00M | 121.26M | 125.99M | 345.73M | Investing Cash Flow |
| 164.39M | 206.45M | -55.22M | -113.54M | -75.84M | -99.00M | Financing Cash Flow |
| -278.05M | -211.42M | -181.34M | -41.64M | -86.30M | -230.15M |
Advantage Solutions Technical Analysis
Negative
1.60
Price Trends
2.58
Negative
2.95
Negative
3.22
Negative
Market Momentum
-0.20
Positive
19.96
Positive
8.34
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ADV, the sentiment is Negative. The current price of 1.6 is below the 20-day moving average (MA) of 2.43, below the 50-day MA of 2.58, and below the 200-day MA of 3.22, indicating a bearish trend. The MACD of -0.20 indicates Positive momentum. The RSI at 19.96 is Positive, neither overbought nor oversold. The STOCH value of 8.34 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ADV.
Advantage Solutions Risk Analysis
Advantage Solutions disclosed 62 risk factors in its most recent earnings report. Advantage Solutions reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Advantage Solutions Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $16.21B | 11.47 | 37.92% | 3.27% | 6.79% | 7.79% | |
76 Outperform | $205.03B | 28.11 | 27.10% | 1.65% | 2.75% | 10.53% | |
73 Outperform | $26.00B | 14.38 | 16.11% | 2.54% | 8.35% | 26.60% | |
70 Outperform | $10.18B | 15.44 | 17.82% | 4.68% | -1.81% | -35.74% | |
63 Neutral | $8.80B | 12.83 | 16.04% | 6.10% | 4.34% | -59.80% | |
59 Neutral | $29.20B | 0.14 | -13.78% | 4.02% | 2.18% | -51.50% | |
45 Neutral | $515.86M | ― | -40.41% | ― | -15.17% | -567.89% |
* Communication Services Sector Average
Performance Comparison
ADV
Advantage Solutions
1.69
-2.36
-58.27%
ACN
Accenture
327.79
-44.72
-12.01%
IPG
Interpublic Group of Companies
26.35
-5.27
-16.67%
OMC
Omnicom Group
82.51
-10.27
-11.07%
WPP
WPP
40.89
-2.47
-5.70%
PUBGY
Publicis Groupe SA
25.49
-0.23
-0.89%
Advantage Solutions Earnings Call Summary
Earnings Call Date: Mar 7, 2025 | % Change Since: -32.20% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with notable efficiency gains and strong performance in experiential services, but faced challenges with revenue declines in branded and retailer services. The company showed progress in technology investments and debt management, yet macroeconomic headwinds and market uncertainties remain significant concerns.Highlights
Adjusted EBITDA Growth
Fourth quarter adjusted EBITDA increased by 9% to $95 million, and full year 2024 adjusted EBITDA reached $356 million, up 1% from the prior year.
Experiential Services Success
Experiential services delivered strong results with revenues of $945 million, an increase of approximately 11%, and adjusted EBITDA rose by 43% with margins expanding by 180 basis points.
Cost Discipline and Efficiency Gains
Achieved cost discipline and efficiency across the business, resulting in improved operating efficiency and positioning for long-term profitable growth.
Debt Reduction and Cash Management
Voluntarily repurchased approximately $158 million of debt and reduced DSOs to 61 days, generating over $20 million of cash from net working capital in 2024.
Technology and Data Advancements
Significant progress in IT and data advancements, including ERP system implementation and cloud-based CRM adoption to improve service delivery and decision-making.
Lowlights
Revenue Decline in Branded Services
Branded services revenue was down approximately 4% to $1.1 billion, with adjusted EBITDA decreasing by 11% and margins declining by 90 basis points.
Overall Revenue Decline
Fourth quarter revenues were down 3% to $762 million compared to the prior year, while full year 2024 revenues were flat at $3 billion.
Market Headwinds in Retailer Services
Retailer services experienced a 2% revenue decline due to market softness in regional grocery channels and intentional customer exits.
Macroeconomic Challenges
Challenging macroeconomic environment with significant increase in value-seeking shopping behavior, rising consumer debt levels, and uncertainty around tariffs.
Company Guidance
In the Advantage Solutions Inc. fourth quarter and full year 2024 earnings call, the company provided detailed guidance on its performance and strategic direction. The fourth quarter revenues stood at $762 million, experiencing a 3% decline year-over-year, while adjusted EBITDA increased by 9% to $95 million. For the full year 2024, revenues remained flat at $3 billion with adjusted EBITDA rising by 1% to $356 million, aligning with market expectations despite macroeconomic challenges. In 2025, the company anticipates low single-digit revenue and adjusted EBITDA growth, maintaining a focus on technology and labor efficiency. Capital expenditures are projected to be between $65 million and $75 million, with an emphasis on IT infrastructure and AI-assisted staffing. The company aims for adjusted unlevered free cash flow to exceed 50% of adjusted EBITDA, despite one-time impacts on cash flow. The strategic plan includes further investment in data architecture, ERP systems, and workforce optimization to drive long-term growth and operational efficiency.Advantage Solutions Corporate Events
Executive/Board Changes
Advantage Solutions Announces Chief Accounting Officer Resignation
Neutral
Jan 3, 2025
Bevin Conley, the Chief Accounting Officer and Principal Accounting Officer of Advantage Solutions Inc., has announced her resignation effective February 7, 2025, to pursue another career opportunity. Conley’s departure is not due to any disagreements related to accounting principles or practices, financial statement disclosures, or internal controls with the company’s auditors or management.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.