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CaesarStone Sdot-yam (CSTE)
:CSTE
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CaesarStone Sdot-Yam
(NASDAQ:CSTE)
46Neutral
Positive Factors
Cost Savings
With an incremental ~$10M of cost savings to be realized and continued gross margin improvement expected, the company remains well positioned to capitalize on the eventual demand recovery.
Market Recovery Potential
There are signs the worst is behind the Company, and should macro relief come as self-help initiatives take full hold, there could be material upside to numbers and valuation for this business.
Production Efficiency
The company’s improved production footprint not only offset pressure from unfavorable product mix and lower fixed cost absorption but resulted in a ~80bps expansion of gross margin.
Negative Factors
Earnings Performance
Caesarstone reported weaker than anticipated results as persistent macro headwinds continue to suppress demand while unfavorable product mix placed additional pressure on margins.
Sales and EBITDA Decline
The run of extraordinarily weak R&R activity is expected to continue with another significant decline in sales and comparable adjusted EBITDA.
CaesarStone Sdot-Yam (CSTE) vs. S&P 500 (SPY)
Market Cap
$83.97M
Dividend YieldN/A
Average Volume (3M)68.62K
Price to Earnings (P/E)―
Beta (1Y)0.82
Revenue Growth-21.59%
EPS Growth60.24%
CountryUS
Employees1,532
SectorIndustrials
Sector Strength65
IndustryConstruction
Share Statistics
EPS (TTM)-1.24
Shares Outstanding34,555,830
10 Day Avg. Volume97,689
30 Day Avg. Volume68,620
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.21
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$5.00Price Target Upside105.76% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
CaesarStone Sdot-Yam Business Overview & Revenue Model
Company DescriptionCaesarStone Sdot-Yam (CSTE) is a leading global manufacturer and designer of premium quartz surfaces, primarily used in both residential and commercial applications. The company is headquartered in Sdot-Yam, Israel, and operates within the construction and home improvement sectors. CaesarStone's core products include a wide variety of quartz countertops and surfaces known for their durability, design flexibility, and aesthetic appeal.
How the Company Makes MoneyCaesarStone Sdot-Yam generates revenue through the manufacture and sale of quartz surfaces, which are distributed worldwide through a network of distributors, retailers, and direct sales channels. The company's key revenue streams include sales to the residential market, where quartz surfaces are used primarily in kitchens and bathrooms, and to the commercial market, which includes applications in hotels, restaurants, and office buildings. CaesarStone also benefits from strategic partnerships with home improvement retailers and interior design firms, which help to enhance its market presence and drive sales. Additionally, the company's commitment to innovation and product development ensures a steady introduction of new designs and products, contributing to sustained revenue growth.
CaesarStone Sdot-Yam Financial Statement Overview
Summary
CaesarStone's financial performance is challenging, characterized by declining revenue and profit margins and increased leverage. However, the company maintains liquidity and recently reported positive free cash flow, which mitigates some concerns.Income Statement
CaesarStone Sdot-Yam has experienced declining revenue over the years, with a significant drop from 2022 to 2024. Gross profit margins have also declined from 2020 to 2024, indicating increased cost pressures or competitive pricing. The net profit margin is negative due to consecutive net losses, raising concerns about long-term profitability. The company has been unable to maintain stable EBIT and EBITDA margins, with negative figures in recent years, highlighting operational inefficiencies or market challenges.45
Neutral
Balance Sheet
The balance sheet reflects a moderate level of stability with a debt-to-equity ratio that has increased over time, indicating rising leverage. However, equity has decreased, reducing financial flexibility. The equity ratio has dropped, suggesting a decline in asset financing through equity. Despite these concerns, the company maintains a reasonable level of cash and short-term investments, providing some buffer against financial uncertainties.55
Neutral
Cash Flow
The cash flow statement shows a volatile trend in operating cash flow and free cash flow. While the company managed to generate positive free cash flow in the latest period, it has seen significant fluctuations over the years. The operating cash flow to net income ratio is unstable, and the free cash flow to net income ratio emphasizes the challenges in converting revenue into cash flow. These factors suggest cash flow management issues that need attention.50
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 443.22M | 565.23M | 690.81M | 643.89M | 486.41M |
| Gross Profit | ||||
| 96.67M | 91.94M | 163.25M | 171.50M | 133.94M |
| EBIT | ||||
| -41.89M | -88.03M | 84.97M | 27.43M | 35.16M |
| EBITDA | ||||
| -20.61M | -51.62M | -13.30M | 61.41M | 58.30M |
| Net Income Common Stockholders | ||||
| -42.83M | -107.66M | -56.37M | 18.97M | 7.22M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 106.34M | 91.12M | 59.16M | 85.54M | 122.36M |
| Total Assets | ||||
| 549.04M | 579.86M | 752.98M | 867.65M | 820.92M |
| Total Debt | ||||
| 136.86M | 146.00M | 155.59M | 164.36M | 148.77M |
| Net Debt | ||||
| 79.52M | 91.38M | 103.51M | 90.05M | 34.52M |
| Total Liabilities | ||||
| 275.26M | 257.01M | 324.03M | 365.49M | 325.87M |
| Stockholders Equity | ||||
| 277.17M | 315.06M | 426.63M | 499.88M | 492.94M |
| Cash Flow | Free Cash Flow | |||
| 21.45M | 55.36M | -41.11M | -10.51M | 27.79M |
| Operating Cash Flow | ||||
| 31.87M | 66.53M | -23.31M | 20.97M | 47.62M |
| Investing Cash Flow | ||||
| -24.36M | -40.53M | -7.29M | -36.66M | -68.31M |
| Financing Cash Flow | ||||
| -3.04M | -23.78M | 9.16M | -23.76M | -6.08M |
CaesarStone Sdot-Yam Technical Analysis
Negative
2.43
Price Trends
3.64
Negative
4.01
Negative
4.46
Negative
Market Momentum
-0.34
Positive
19.53
Positive
2.91
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CSTE, the sentiment is Negative. The current price of 2.43 is below the 20-day moving average (MA) of 2.94, below the 50-day MA of 3.64, and below the 200-day MA of 4.46, indicating a bearish trend. The MACD of -0.34 indicates Positive momentum. The RSI at 19.53 is Positive, neither overbought nor oversold. The STOCH value of 2.91 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CSTE.
CaesarStone Sdot-Yam Risk Analysis
CaesarStone Sdot-Yam disclosed 51 risk factors in its most recent earnings report. CaesarStone Sdot-Yam 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
CaesarStone Sdot-Yam Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
67 Neutral | $79.61M | 7.44 | 9.67% | ― | ― | ― | |
64 Neutral | $107.08M | 11.26 | 6.42% | 2.01% | 9.23% | -16.27% | |
62 Neutral | $8.05B | 13.60 | 4.04% | 3.11% | 3.70% | -14.19% | |
46 Neutral | $83.97M | ― | -14.60% | ― | -21.59% | 60.24% | |
35 Underperform | $56.76M | ― | -19.57% | ― | -49.19% | -1214.66% |
* Industrials Sector Average
Performance Comparison
CSTE
CaesarStone Sdot-Yam
2.43
-1.68
-40.88%
TWIN
Twin Disc
7.57
-8.66
-53.36%
YGMZ
MingZhu Logistics Holdings
0.74
-2.51
-77.23%
SFWL
Shengfeng Development Limited Class A
0.98
-0.72
-42.35%
CaesarStone Sdot-Yam Earnings Call Summary
Earnings Call Date: Mar 5, 2025 | % Change Since: -33.61% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant improvements in operational efficiency and financial flexibility, with notable achievements in cash flow and margin expansion. However, these positives were overshadowed by considerable revenue declines, ongoing macroeconomic challenges, and legal liabilities related to silicosis claims.Highlights
Improved Gross Margin Performance
Gross margin improved to 19.4% in Q4 2024 from 18.1% in the prior year quarter, and full-year 2024 gross margin improved to 21.8% from 16.3% in 2023.
Strong Net Cash Position
Ended the year with a net cash position of $101.8 million, up from $83.5 million in 2023, demonstrating financial flexibility.
Strategic Transformation Initiatives
Successfully optimized production footprint and strengthened innovation capabilities. Over 70% of production is now sourced from global manufacturing partners.
Positive Free Cash Flow
Second consecutive year of positive free cash flow, with $31.9 million generated from operations in 2024.
Improved Market Conditions in Israel
Sales in Israel improved by 53.6% on a constant currency basis in Q4 2024 due to improved market conditions and favorable year-over-year comparisons.
Lowlights
Significant Revenue Decline
Q4 2024 revenue was $97.9 million, down 23.8% year-over-year on a constant currency basis, reflecting lower sales volume and softer market conditions.
Ongoing Macroeconomic Challenges
Revenue decline due to softer market conditions and increased competition in main markets, including the US, Canada, and Australia.
Adjusted EBITDA Loss
Adjusted EBITDA in Q4 2024 was a loss of $8 million compared to a gain of $1.4 million in the prior year quarter, and full-year 2024 adjusted EBITDA was a loss of $11.5 million.
Silicosis Claims and Legal Challenges
Continued exposure to silicosis claims in the US, Australia, and Israel. Recorded a provision of $50 million for pending claims, with potential material impact on business.
Company Guidance
During the Caesarstone Fourth Quarter 2024 Earnings Conference Call, the company provided several key metrics and guidance for fiscal year 2025. The fourth quarter revenue was reported at $97.9 million, marking a 23.8% year-over-year decline on a constant currency basis, while the gross margin improved by 130 basis points to 19.4%. For the full year 2024, revenue was $443.2 million, down from $565.2 million in 2023, with an adjusted EBITDA loss of $11.5 million. The company ended 2024 with a net cash position of $101.8 million, up from $83.5 million at the end of 2023. Looking ahead, Caesarstone anticipates a modest improvement in full year 2025 adjusted EBITDA, driven by an additional $10 million in cost savings from restructuring initiatives. The company expects continued gross margin improvement in 2025, supported by an optimized production footprint, while Q1 2025 adjusted EBITDA is projected to remain comparable to the first quarter of 2024.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.