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Liquidity Services (LQDT)
NASDAQ:LQDT
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Liquidity Services
(NASDAQ:LQDT)
75Outperform
Positive Factors
Business Growth
All of LSI’s four business segments contributed increased GMV, sales, and direct profit, with an annual GMV run rate surpassing $1.5 billion and a 13% rise in auction participants.
Financial Performance
LSI posted solid Q1/25 results that exceeded expectations and guidance, with GMV increasing 26% to $386 million and revenue up 72% to $122 million year-over-year.
Negative Factors
Segment Performance
The CAG segment experienced a 2% GMV decrease to $55.4 million due to lower availability of large-spot purchase transactions with international clients, despite increased consignment sales in industrial and heavy equipment categories.
Liquidity Services (LQDT) vs. S&P 500 (SPY)
Market Cap
$926.52M
Dividend YieldN/A
Average Volume (3M)402.94K
Price to Earnings (P/E)39.4
Beta (1Y)0.88
Revenue Growth32.16%
EPS Growth27.32%
CountryUS
Employees781
SectorConsumer Cyclical
Sector Strength49
IndustryRetail - Discretionary
Share Statistics
EPS (TTM)0.75
Shares Outstanding31,039,309
10 Day Avg. Volume365,434
30 Day Avg. Volume402,936
Financial Highlights & Ratios
PEG Ratio1.44
Price to Book (P/B)N/A
Price to Sales (P/S)2.24
Price to Cash Flow (P/CF)-19.10
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
$41.00Price Target Upside40.12% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Liquidity Services Business Overview & Revenue Model
Company DescriptionLiquidity Services, Inc. engages in the provision of e-commerce solutions to manage, value, and sell inventory and equipment for business and government clients. It operates through the following business segments: GovDeals; Capital Assets Group; Retail Supply Chain Group; Machinio; and Corporate and Other. The GovDeals segment provides self-service solutions in which sellers list their own assets, and it consists of marketplaces that enable local and state government. The CAG segment offers full-service solutions to sellers and it consists of marketplaces that enable federal government agencies as well as commercial businesses to sell surplus, salvage, and scrap assets. The RSCG segment consists of marketplaces that enable corporations located in the United States and Canada to sell surplus and salvage consumer goods and retail capital assets. The Machinio segment involves in the global online platform for listing used equipment for sale in the construction, machine tool, transportation, printing and agriculture sectors. The Corporate and Other segment comprises company's IronDirect and TruckCenter operations. The company was founded by William P. Angrick III, Jaime Mateus-Tique and Benjamin Ronald Brown in November 1999 and is headquartered in Bethesda, MD.
How the Company Makes MoneyLiquidity Services makes money primarily through its online auction marketplaces, where it facilitates the sale of surplus and salvage assets. The company earns revenue by charging sellers a commission fee based on the total value of the goods sold. Additionally, Liquidity Services provides value-added services such as logistics, asset valuation, and inventory management, which contribute to its revenue streams. Significant partnerships with government agencies and large corporations enhance its marketplace offerings and expand its customer base, further boosting earnings. The company's ability to attract a diverse range of buyers to its platforms also plays a critical role in its financial performance.
Liquidity Services Financial Statement Overview
Summary
Liquidity Services exhibits a strong financial position across its income statement, balance sheet, and cash flow statement. The company has shown consistent revenue growth and maintains solid margins, indicating operational efficiency. Its balance sheet reflects low leverage and a healthy equity base, while cash flow management is strong, providing a solid foundation for future investments and growth. Despite a minor decline in EBIT, the overall financial health is commendable, with potential for continued success in the retail discretionary industry.Income Statement
Liquidity Services shows strong financial performance in the TTM (Trailing-Twelve-Months) with a Gross Profit Margin of 63.84% and a Net Profit Margin of 5.77%. The company has seen substantial revenue growth, with a TTM revenue of $414.32 million, representing a 13.98% increase from the prior year. The EBIT and EBITDA margins of 6.99% and 10.28% respectively, highlight solid operational efficiency. However, the dip in EBIT from previous years indicates a slight decline in operational profitability.80
Positive
Balance Sheet
The balance sheet of Liquidity Services is robust, with a low Debt-to-Equity Ratio of 0.07, indicating minimal leverage risk. The company maintains a strong Equity Ratio of 56.77%, suggesting a healthy capital structure. However, the total assets have only slightly increased, which could indicate limited asset expansion. Overall, the company is financially stable with a strong equity base.75
Positive
Cash Flow
The cash flow statement is impressive, with a strong Free Cash Flow of $57.96 million in the TTM, reflecting a significant growth from previous periods. The Operating Cash Flow to Net Income Ratio of 2.80 indicates efficient cash generation relative to net income. The Free Cash Flow to Net Income Ratio of 2.43 further supports the company's strong cash position. Liquidity Services demonstrates excellent cash flow management, which is crucial for sustaining operations and funding growth.85
Very Positive
| Breakdown | |||||
| TTM | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 | Sep 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 414.32M | 363.32M | 314.46M | 280.05M | 257.53M | 205.94M | Gross Profit |
| 192.34M | 185.17M | 172.14M | 160.64M | 149.85M | 109.92M | EBIT |
| 28.97M | 23.40M | 26.11M | -1.59M | 27.17M | -3.89M | EBITDA |
| 41.51M | 35.52M | 37.36M | 57.98M | 34.14M | 3.32M | Net Income Common Stockholders |
| 23.89M | 19.99M | 20.98M | 40.32M | 50.95M | -3.77M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 139.15M | 155.54M | 118.17M | 97.94M | 106.33M | 76.04M | Total Assets |
| 333.21M | 346.89M | 288.97M | 288.10M | 255.58M | 196.63M | Total Debt |
| 13.36M | 14.24M | 10.68M | 14.23M | 14.35M | 11.32M | Net Debt |
| -115.34M | -138.98M | -99.60M | -81.89M | -91.99M | -64.72M | Total Liabilities |
| 144.04M | 164.33M | 127.44M | 133.57M | 120.56M | 84.82M | Stockholders Equity |
| 189.16M | 182.56M | 161.53M | 154.54M | 135.01M | 111.81M |
| Cash Flow | Free Cash Flow | ||||
| 57.96M | 61.31M | 41.63M | 36.71M | 59.97M | 12.23M | Operating Cash Flow |
| 66.95M | 70.22M | 47.02M | 44.83M | 65.42M | 16.48M | Investing Cash Flow |
| -24.44M | -16.11M | -11.43M | -21.08M | -1.00M | 28.65M | Financing Cash Flow |
| -10.75M | -11.17M | -22.07M | -31.94M | -34.66M | -5.70M |
Liquidity Services Technical Analysis
Negative
29.26
Price Trends
33.73
Negative
29.77
Negative
25.46
Positive
Market Momentum
-1.22
Positive
31.48
Neutral
12.55
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LQDT, the sentiment is Negative. The current price of 29.26 is below the 20-day moving average (MA) of 32.85, below the 50-day MA of 33.73, and above the 200-day MA of 25.46, indicating a neutral trend. The MACD of -1.22 indicates Positive momentum. The RSI at 31.48 is Neutral, neither overbought nor oversold. The STOCH value of 12.55 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LQDT.
Liquidity Services Risk Analysis
Liquidity Services disclosed 37 risk factors in its most recent earnings report. Liquidity Services 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
Liquidity Services Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $926.52M | 39.41 | 13.48% | ― | 32.16% | 27.32% | |
73 Outperform | $2.11T | 35.11 | 24.29% | ― | 10.99% | 91.61% | |
73 Outperform | $30.35B | 16.52 | 34.29% | 1.66% | 2.79% | -23.30% | |
59 Neutral | $12.50B | 10.40 | 2.26% | 3.63% | 1.65% | -18.81% | |
54 Neutral | $191.38M | ― | -5.78% | ― | 4.96% | 55.95% | |
46 Neutral | $4.22B | ― | 17.86% | ― | -1.27% | 38.07% |
* Consumer Cyclical Sector Average
Performance Comparison
LQDT
Liquidity Services
29.26
11.68
66.44%
AMZN
Amazon
193.89
15.14
8.47%
EBAY
eBay
64.25
12.72
24.68%
RBA
RB Global
94.43
19.53
26.07%
W
Wayfair
31.00
-31.58
-50.46%
BZUN
Baozun
3.19
0.41
14.75%
Liquidity Services Earnings Call Summary
Earnings Call Date: Feb 6, 2025 | % Change Since: -8.13% | Next Earnings Date: May 8, 2025
Earnings Call Sentiment Positive
Liquidity Services delivered a strong first quarter for fiscal year 2025, with record GMV and revenue growth across all segments. The acquisition of Auction Software and Simple Auction Site is expected to further enhance their market capabilities. Despite facing certain market challenges, the company maintains a solid financial position and is poised for continued growth.Highlights
Record Quarterly GMV
Liquidity Services reported a record quarterly GMV of $386.1 million, up 26% from the previous year, driven by double-digit growth across all segments.
Strong Revenue Growth
Revenue increased by 72% year-over-year to $122.3 million, with a notable contribution from lower-touch purchase programs in the retail segment.
GovDeals and CAG Segments Growth
GovDeals' GMV grew by 11%, revenue by 29%, and direct profit by 25%, while the CAG segment saw a 31% increase in GMV and a 27% increase in direct profit, driven by strong performance in energy and heavy equipment verticals.
Machinio Segment Expansion
Machinio achieved double-digit organic growth and now has over 4,000 subscribers across 100 countries, with significant growth potential in the Asia Pacific region.
Acquisition of Auction Software and Simple Auction Site
Liquidity Services acquired Auction Software and Simple Auction Site to enhance market reach and software development capabilities, expected to support growth in various categories including retail and Machinio.
Strong Financial Position
Liquidity Services ended the quarter with $139.1 million in cash and no debt, providing a strong financial foundation for future growth.
Lowlights
Challenging Market Conditions
Despite growth, the company noted persistent inflation and choppy market conditions affecting different categories.
Potential Impact of New Tariffs
The company mentioned potential challenges from new tariff situations, though historically used equipment scarcity has been neutral to positive for their business.
Company Guidance
During Liquidity Services, Inc.'s Q1 Fiscal Year 2025 conference call, management provided robust guidance emphasizing continued growth and expansion. The company achieved a record quarterly GMV of $386.1 million, marking a 26% increase from the previous year, while revenue rose 72% to $122.3 million. Each business segment reported double-digit GMV growth, with GovDeals and the Capital Assets Group (CAG) segments increasing by 11% and 31% respectively. The retail segment set new records with a 65% GMV increase. The company expects Q2 GMV to range between $360 million and $390 million, with GAAP net income projected between $5.5 million and $8 million. Liquidity Services anticipates continued growth fueled by strategic acquisitions, such as Auction Software and Simple Auction Site, and aims to reach a $2 billion annual GMV by enhancing their marketplace and expanding their seller and buyer base.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.