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Charles & Colvard Ltd (CTHR)
NASDAQ:CTHR
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Charles & Colvard
(NASDAQ:CTHR)
39Underperform
Charles & Colvard (CTHR) vs. S&P 500 (SPY)
Market Cap
$2.55M
Dividend YieldN/A
Average Volume (3M)16.45K
Price to Earnings (P/E)―
Beta (1Y)0.78
Revenue Growth-26.68%
EPS Growth27.41%
CountryUS
Employees48
SectorConsumer Cyclical
Sector Strength55
IndustryLuxury Goods
Share Statistics
EPS (TTM)-4.68
Shares Outstanding3,118,273
10 Day Avg. Volume16,488
30 Day Avg. Volume16,449
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.13
Price to Cash Flow (P/CF)-0.40
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 TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
Charles & Colvard Business Overview & Revenue Model
Company DescriptionCharles & Colvard, Ltd. is a publicly traded company specializing in the creation and sale of moissanite gemstones and fine jewelry. The company is recognized as a pioneer in the lab-created gemstone industry, offering a range of jewelry products including rings, earrings, necklaces, and bracelets primarily made from its proprietary moissanite gemstones. Operating within the luxury goods and jewelry sectors, Charles & Colvard focuses on providing high-quality, ethically sourced alternatives to traditional gemstones.
How the Company Makes MoneyCharles & Colvard generates revenue primarily through the sale of its moissanite gemstones and fine jewelry products. The company operates an e-commerce platform, which serves as a direct-to-consumer sales channel. Additionally, it distributes its products through various wholesale and retail partners, expanding its market reach. Revenue streams include direct sales from its website, sales through third-party e-commerce platforms, and wholesale agreements with jewelry retailers. Charles & Colvard's strategic partnerships and marketing efforts contribute to brand visibility and consumer demand, driving its revenue growth.
Charles & Colvard Financial Statement Overview
Summary
Income Statement
Balance Sheet
Cash Flow
| Breakdown | |||||
| TTM | Jun 2023 | Jun 2022 | Jun 2021 | Jun 2020 | Jun 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 23.68M | 29.95M | 43.09M | 39.24M | 29.19M | 32.24M | Gross Profit |
| 988.85K | 4.73M | 20.24M | 18.43M | 7.99M | 14.89M | EBIT |
| -18.60M | -13.98M | 2.87M | 5.51M | -6.32M | 2.27M | EBITDA |
| -17.62M | -13.03M | 3.35M | 6.23M | -5.67M | 3.14M | Net Income Common Stockholders |
| -18.29M | -19.58M | 2.37M | 12.81M | -6.16M | 2.28M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 2.79M | 10.45M | 15.67M | 21.30M | 13.99M | 12.47M | Total Assets |
| 48.89M | 48.88M | 69.21M | 64.92M | 48.90M | 51.15M | Total Debt |
| 0.00 | 2.93M | 3.70M | 4.17M | 1.79M | 0.00 | Net Debt |
| -2.79M | -7.52M | -11.96M | -17.14M | -12.20M | -12.47M | Total Liabilities |
| 1.84M | 9.11M | 9.65M | 9.23M | 7.47M | 5.43M | Stockholders Equity |
| 47.05M | 39.77M | 59.56M | 55.69M | 41.44M | 45.72M |
| Cash Flow | Free Cash Flow | ||||
| -7.23M | -5.16M | -988.11K | 5.99M | -286.79K | 491.04K | Operating Cash Flow |
| -6.10M | -3.88M | 572.55K | 6.47M | 249.19K | 916.80K | Investing Cash Flow |
| -1.13M | -1.28M | -1.56M | -733.47K | -535.98K | -425.76K | Financing Cash Flow |
| 500.00K | -451.81K | 720.50K | 1.09M | 1.90M | 9.12M |
Charles & Colvard Risk Analysis
Charles & Colvard disclosed 22 risk factors in its most recent earnings report. Charles & Colvard reported the most risks in the “Ability to Sell” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Charles & Colvard 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 | $28.09B | 8.56 | 9.14% | ― | -2.60% | 16.71% | |
65 Neutral | $227.27M | 13.79 | 4.74% | 9.66% | -4.18% | -58.51% | |
59 Neutral | $11.76B | 10.11 | -0.70% | 3.92% | 1.27% | -16.30% | |
57 Neutral | $2.53B | 5.56 | 2.62% | 2.28% | -6.52% | -104.24% | |
46 Neutral | $56.45M | ― | -50.98% | ― | -18.93% | 35.38% | |
39 Underperform | $2.55M | ― | ― | -26.68% | 27.41% | ||
38 Underperform | $16.00M | ― | 77.02% | ― | -6.02% | ― |
* Consumer Cyclical Sector Average
Performance Comparison
CTHR
Charles & Colvard
0.81
-2.21
-73.18%
BIDU
Baidu
78.47
-23.85
-23.31%
FOSL
Fossil Group
0.98
0.03
3.16%
KIRK
Kirkland's
1.15
-1.20
-51.06%
MOV
Movado Group
13.81
-10.71
-43.68%
SIG
Signet Jewelers
57.78
-40.40
-41.15%
Charles & Colvard Earnings Call Summary
Earnings Call Date: Jan 30, 2025 | % Change Since: -47.40% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a mixed performance with significant challenges, such as revenue decline and margin erosion, contrasted by improvements in direct-to-consumer sales and inventory management. While there are promising developments in specific segments, the overall financial performance remains under pressure.Highlights
Growth in Direct-to-Consumer Sales
Net sales for the online channel segment, primarily direct-to-consumer, increased to $4.1 million, representing 77% of total net sales, up 7% from the previous year.
Increase in Lab-grown Gemstone Sales
Revenues for Cadia Lab-grown diamonds increased by 16% compared to Q3 FY 2023, and Forever One moissanite gemstone revenues increased by 5%.
Inventory Management and Reduction
Inventory decreased by 24% for the quarter, with a year-over-year decrease of $8 million due to strategic inventory write-downs.
Strong Liquidity and Capital Position
The company ended the quarter with $9.2 million in total cash and a working capital of $12.7 million.
Lowlights
Overall Revenue Decline
Total net sales decreased by 21% compared to Q3 FY 2023, primarily due to weak consumer confidence and pricing pressures in the lab-grown diamond market.
Margin Erosion
Gross margin decreased to 23% from 32% in the year-ago quarter, attributed to rising commodity prices and a disposition strategy for obsolete inventory.
Increased Operating Expenses
Operating expenses increased by 13% from the previous year, driven by marketing and general administrative costs.
Net Loss
Reported a net loss of $3.6 million or $0.12 per diluted share for Q3 2024.
Company Guidance
In the Charles & Colvard third quarter fiscal year 2024 earnings call, the company reported a revenue of $5.3 million, reflecting a 21% decrease compared to Q3 FY 2023. However, this represents a sequential improvement with a 12 basis point and 3 basis point reduction over Q1 and Q2 FY 2024, respectively. The company continued to face margin erosion due to rising gold prices and promotional pricing pressures. Despite these challenges, Charles & Colvard saw a 5% increase in revenues for its Forever One moissanite gemstone product brand and a 16% rise in Cadia Lab-grown diamond sales. Finished jewelry net sales comprised 93% of the total sales for the quarter. The company maintained a strong liquidity position with $9.2 million in cash and a working capital of $12.7 million. Operating expenses rose by 13%, reflecting investments in marketing and brand awareness initiatives. The company reported a net loss of $3.6 million, or $0.12 per diluted share, but emphasized ongoing initiatives to drive revenue and achieve sustainable growth.Charles & Colvard Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Charles & Colvard Amends Executive Compensation Agreements
Neutral
Mar 20, 2025
On March 18, 2025, Charles & Colvard, Ltd. announced amendments to the employment agreements of its President and CEO, Don O’Connell, and CFO, Clint J. Pete, as part of efforts to reduce short-term spending. The amendments involve deferring 25% of Mr. O’Connell’s and 20% of Mr. Pete’s base salaries, with payment deferred until March 15, 2026, a change of control, or at the discretion of the board, starting from March 3, 2025.
Delistings and Listing ChangesRegulatory Filings and Compliance
Charles & Colvard Faces Nasdaq Non-Compliance Notice
Neutral
Mar 3, 2025
On February 25, 2025, Charles & Colvard received a notice from Nasdaq indicating non-compliance with listing rules due to delayed filing of financial reports, including the Form 10-Q for the quarter ended December 31, 2024. Despite the notice, there is no immediate impact on the trading of the company’s stock, and they are working to resolve the issue by the April 14, 2025 deadline to regain compliance.
Legal Proceedings
Charles & Colvard Settles $4.77M Dispute with Wolfspeed
Negative
Feb 14, 2025
Charles & Colvard, Ltd. announced a settlement agreement with Wolfspeed, Inc., related to a dispute over a breached exclusive supply agreement for silicon carbide (SiC) materials. The settlement, reached on February 10, 2025, requires Charles & Colvard to pay $4.77 million to Wolfspeed, resolving claims involving purchased inventory, attorney fees, and interest, and marks the termination of their supply agreement.
Executive/Board Changes
Charles & Colvard Adjusts Board Size, Director Resigns
Neutral
Jan 24, 2025
On January 20, 2025, Benedetta Casamento resigned from the Board of Directors of Charles & Colvard, Ltd. Her departure was not due to any disagreements with the company’s operations or policies. On the same day, Charles & Colvard’s Board of Directors amended the company’s Bylaws to allow for a board size ranging from four to nine directors, previously set between five and ten.
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.