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aka Brands Holding Corp (AKA)
NYSE:AKA
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aka Brands Holding Corp
(NYSE:AKA)
41Neutral
Positive Factors
Financial Valuation
The stock is trading at significantly lower multiples compared to its peer group, presenting a potential value opportunity as the company executes its strategy.
Market Positioning
A.k.a. distinguishes itself with its portfolio of digitally native fashion brands specifically targeting the next generation of consumers.
Omnichannel Expansion
Strategic expansion into omnichannel experiences through physical stores strengthens brand awareness and generates a 'halo effect' that boosts online traffic.
Negative Factors
Revenue and EBITDA Multiples
The stock is now trading at less than 0.5 times revenue and less than 8.0 times EBITDA, with potential for the multiple to work higher as the company executes its strategy.
aka Brands Holding Corp (AKA) vs. S&P 500 (SPY)
Market Cap
$129.49M
Dividend YieldN/A
Average Volume (3M)11.86K
Price to Earnings (P/E)―
Beta (1Y)1.55
Revenue Growth5.21%
EPS Growth73.44%
CountryUS
Employees1,350
SectorConsumer Cyclical
Sector Strength62
IndustrySpecialty Retail
Share Statistics
EPS (TTM)-2.46
Shares Outstanding10,693,150
10 Day Avg. Volume8,454
30 Day Avg. Volume11,864
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.26
Price to Cash Flow (P/CF)5.20
P/FCF Ratio4.80
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$21.67Price Target Upside100.46% Upside
Rating ConsensusHold
Number of Analyst Covering4
aka Brands Holding Corp Business Overview & Revenue Model
Company Descriptionaka Brands Holding Corp (AKA) is a global fashion company specializing in the design, production, and sale of direct-to-consumer apparel. The company operates through a portfolio of digitally native brands that cater to various fashion segments, focusing primarily on young consumers. These brands offer a wide range of clothing and accessories that reflect contemporary trends and styles. aka Brands Holding Corp leverages its deep understanding of digital marketing and e-commerce strategies to engage with a global customer base.
How the Company Makes Moneyaka Brands Holding Corp generates revenue primarily through the sale of apparel and fashion accessories via its portfolio of digital brands. The company's revenue model is centered on direct-to-consumer sales through e-commerce platforms, which allows it to maintain control over its brand identity, customer experience, and pricing strategies. By operating multiple brands, aka Brands Holding Corp diversifies its revenue streams, catering to different demographics and fashion preferences. The company benefits from its data-driven approach to marketing, which enhances customer acquisition and retention. Additionally, partnerships with social media influencers and strategic collaborations help amplify brand visibility and drive sales.
aka Brands Holding Corp Financial Statement Overview
Summary
aka Brands Holding Corp is facing considerable financial challenges across all verticals. Income and profitability metrics are under pressure, with negative net income and low margins. The balance sheet shows increasing leverage, posing financial risks. The cash flow situation is critical, with a sharp decline in operating cash flow and negative free cash flow indicating liquidity issues. The company must address these challenges to improve its financial health and stability.Income Statement
The income statement reveals a challenging financial position. The gross profit margin for 2024 is approximately 56.98%, showing some efficiency in cost management. However, the company is struggling with profitability, reflected in a negative net profit margin of -4.52% for 2024 and a significant net loss. Revenue has shown fluctuations with a slight growth of 5.20% from 2023 to 2024, indicating some market presence, but the EBIT and EBITDA margins remain negative, highlighting operational inefficiencies.40
Negative
Balance Sheet
The balance sheet presents a mixed picture. The debt-to-equity ratio has increased to 1.56 in 2024 from 0.92 in 2023, indicating rising leverage which may be risky. Return on equity is negative due to net losses, reflecting poor profitability for shareholders. However, the equity ratio stands at 30.54%, suggesting a moderate level of equity financing. The high level of liabilities relative to equity and assets poses a potential risk for the company.45
Neutral
Cash Flow
The cash flow statement highlights significant challenges. Operating cash flow has dropped sharply from $33.43 million in 2023 to $0.67 million in 2024, reflecting deteriorating cash generation from operations. Free cash flow turned negative in 2024, impacting financial flexibility. The operating cash flow to net income ratio is low due to negative net income, indicating cash flow issues. The company needs to improve its cash flow management to sustain operations.35
Negative
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 574.70M | 546.26M | 611.74M | 562.19M | 215.92M | Gross Profit |
| 327.50M | 300.28M | 337.25M | 307.66M | 126.40M | EBIT |
| -10.32M | -83.41M | 215.00K | 16.38M | 22.14M | EBITDA |
| 6.23M | -66.66M | -143.44M | 27.20M | 28.90M | Net Income Common Stockholders |
| -25.99M | -98.89M | -176.70M | -6.09M | 14.33M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 24.19M | 21.86M | 46.32M | 38.83M | 26.26M | Total Assets |
| 385.20M | 361.72M | 509.64M | 687.85M | 189.44M | Total Debt |
| 183.59M | 136.25M | 184.70M | 135.87M | 10.85M | Net Debt |
| 159.40M | 114.39M | 138.38M | 97.04M | -15.41M | Total Liabilities |
| 267.57M | 213.10M | 262.56M | 236.82M | 50.55M | Stockholders Equity |
| 117.63M | 148.62M | 247.08M | 451.03M | 19.98M |
| Cash Flow | Free Cash Flow | |||
| -10.92M | 27.39M | -20.31M | 15.39M | 19.93M | Operating Cash Flow |
| 669.00K | 33.43M | -319.00K | 23.97M | 21.71M | Investing Cash Flow |
| -11.59M | -6.03M | -25.31M | -278.07M | -2.38M | Financing Cash Flow |
| 15.51M | -52.83M | 33.26M | 269.85M | 1.24M |
aka Brands Holding Corp Technical Analysis
Negative
10.81
Price Trends
14.72
Negative
17.03
Negative
18.96
Negative
Market Momentum
-0.31
Negative
45.78
Neutral
43.78
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AKA, the sentiment is Negative. The current price of 10.81 is below the 20-day moving average (MA) of 13.36, below the 50-day MA of 14.72, and below the 200-day MA of 18.96, indicating a bearish trend. The MACD of -0.31 indicates Negative momentum. The RSI at 45.78 is Neutral, neither overbought nor oversold. The STOCH value of 43.78 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AKA.
aka Brands Holding Corp Risk Analysis
aka Brands Holding Corp disclosed 67 risk factors in its most recent earnings report. aka Brands Holding Corp 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
aka Brands Holding Corp Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $4.49B | 10.96 | 17.56% | ― | 7.71% | 40.01% | |
69 Neutral | $5.90B | 16.79 | 18.03% | 3.42% | 4.63% | 187.50% | |
63 Neutral | $3.78B | 17.91 | 12.01% | 1.75% | -3.35% | -6.09% | |
61 Neutral | $3.77B | 6.82 | 47.77% | ― | 15.60% | 71.45% | |
59 Neutral | $11.40B | 10.19 | -0.83% | 4.03% | 1.27% | -16.17% | |
44 Neutral | $4.84B | ― | -16.13% | 2.90% | -8.42% | 57.91% | |
41 Neutral | $129.49M | ― | -19.52% | ― | 5.21% | 73.44% |
* Consumer Cyclical Sector Average
Performance Comparison
AKA
aka Brands Holding Corp
9.06
-2.70
-22.96%
ANF
Abercrombie Fitch
73.61
-38.22
-34.18%
COLM
Columbia Sportswear
65.62
-8.10
-10.99%
URBN
Urban Outfitters
46.75
7.98
20.58%
VFC
VF
11.11
-0.75
-6.32%
LEVI
Levi Strauss & Co
15.04
-3.67
-19.62%
aka Brands Holding Corp Earnings Call Summary
Earnings Call Date: Mar 6, 2025 | % Change Since: -28.93% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Positive
The earnings call reflects strong performance in the U.S. market and overall revenue growth, supported by a growing active customer base and improved gross margins. However, challenges include sales declines in Australia, New Zealand, and other regions, as well as increased marketing and G&A expenses. The company is expanding its physical and wholesale presence, which is expected to support future growth.Highlights
Strong Revenue Growth
a.k.a. Brands delivered $575 million in net sales for 2024, representing a 5.2% increase over the previous year. U.S. market net sales grew by 17%.
Active Customer Base Expansion
The active customer base grew by 9%, surpassing four million customers, demonstrating successful customer acquisition and retention strategies.
Adjusted EBITDA Growth
The company reported $23.3 million in adjusted EBITDA, a significant year-over-year growth of 69%.
Gross Margin Improvement
Gross margin improved by 200 basis points to 57%, driven by stronger full-price sales.
Successful Store Expansion
Opened five new Princess Polly stores and plans to open seven more in 2025, including a new store in New York City.
Expansion in Wholesale Partnerships
Princess Polly and Petal and Pup will launch new styles across Nordstrom stores nationwide, following a successful pilot.
Lowlights
Sales Decline in Australia and New Zealand
Net sales in Australia and New Zealand declined by 9.6% in Q4 2024 compared to the previous year.
Rest of World Sales Decline
Net sales in the rest of the world region decreased by 13.5% year over year.
Increased Marketing and G&A Expenses
Marketing expenses increased to $22.3 million, representing 14% of net sales, up from 11.6%. G&A expenses increased to 15.7% of net sales, from 15% the previous year.
Tariff Challenges
The company faces potential impacts from tariffs in the U.S., with efforts to mitigate through sourcing adjustments.
Company Guidance
During the earnings call, a.k.a. Brands provided robust guidance for fiscal 2025, building on their strong performance in 2024. The company reported net sales of $575 million for 2024, a 5.2% increase from the previous year, with a significant 17% growth in the U.S. market. Adjusted EBITDA rose by 69% to $23.3 million. For 2025, the company projects net sales between $600 million and $610 million, reflecting a 5% growth at the midpoint, and an adjusted EBITDA range of $27.5 million to $29.5 million. The U.S. market is expected to continue its double-digit growth, while improvements are anticipated in Australia and New Zealand. a.k.a. Brands plans to open seven new Princess Polly stores, expanding their physical retail presence alongside growing wholesale partnerships with retailers like Nordstrom, aiming to enhance brand awareness and profitability. The guidance reflects confidence in leveraging their test-and-repeat merchandising model and AI-driven strategies to optimize operations and customer engagement across channels.aka Brands Holding Corp Corporate Events
Executive/Board ChangesFinancial Disclosures
a.k.a. Brands Reports Strong Q4 Results and Leadership Changes
Positive
Jan 13, 2025
a.k.a. Brands Holding Corp. announced the appointment of Ciaran Long as Chief Executive Officer and Kevin Grant as Chief Financial Officer, both effective January 13, 2025. The company also reported strong preliminary financial results for the fourth quarter and fiscal year 2024, with net sales increasing 6.8% in Q4 and U.S. sales rising by 21.6%. Adjusted EBITDA expectations for the fourth quarter were raised to between $6.0 million and $6.2 million, indicating positive business momentum and growth opportunities.
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.