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Spar Group (SGRP)
NASDAQ:SGRP
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Spar Group
(NASDAQ:SGRP)
67Neutral
Spar Group (SGRP) vs. S&P 500 (SPY)
Market Cap
$31.82M
Dividend YieldN/A
Average Volume (3M)65.80K
Price to Earnings (P/E)2.6
Beta (1Y)-0.82
Revenue Growth-12.74%
EPS Growth751.07%
CountryUS
Employees24,288
SectorIndustrials
Sector Strength69
IndustryCorporate Services
Share Statistics
EPS (TTM)0.51
Shares Outstanding23,449,701
10 Day Avg. Volume59,406
30 Day Avg. Volume65,802
Financial Highlights & Ratios
PEG Ratio0.00353
Price to Book (P/B)N/A
Price to Sales (P/S)0.14
Price to Cash Flow (P/CF)-8.90
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
Spar Group Business Overview & Revenue Model
Company DescriptionSpar Group, Inc. (SGRP) is a leading global provider of merchandising and marketing services. The company specializes in providing a wide range of services, including in-store merchandising, product demonstrations, and retail audits. Spar Group operates across multiple sectors, including consumer goods, electronics, and retail, delivering customized solutions to enhance product visibility and brand promotion for its clients.
How the Company Makes MoneySpar Group generates revenue primarily through service contracts with various retail and manufacturing clients who require merchandising and marketing services. The company focuses on several key revenue streams, including in-store merchandising, where it assists in product setup, shelf maintenance, and promotional displays. Additionally, Spar Group earns money through product demonstrations and sampling events, which help brands engage directly with consumers. Retail audits and compliance checks also contribute to its revenue by ensuring that stores adhere to promotional guidelines and maintain optimal product presentation. Strategic partnerships with major retailers and consumer goods companies are significant factors that bolster Spar Group's earnings, providing a consistent flow of projects and service opportunities.
Spar Group Financial Statement Overview
Summary
Spar Group's financial performance is mixed. While profitability margins and leverage have improved, indicating operational efficiency and financial stability, the decline in revenue by 12.89% and a significant drop in free cash flow generation pose challenges for sustaining growth.Income Statement
The company's income statement shows a mixed performance. The TTM (Trailing-Twelve-Months) gross profit margin is 20.06%, which has slightly decreased from the previous year's 21.12%. The TTM net profit margin stands at 5.35%, showing a significant increase from 1.49% in 2023, indicating improved profitability. However, revenue has decreased by approximately 12.89% in the TTM period compared to 2023, indicating a challenge in maintaining sales growth. EBIT margin improved to 4.34% in the TTM from 3.58% in 2023, and the EBITDA margin improved to 5.01% from 3.80%, reflecting better operational efficiency.75
Positive
Balance Sheet
The balance sheet displays a stable financial position. The debt-to-equity ratio in the TTM is 0.72, which has improved from 0.83 in 2023, showing a reduction in leverage. The return on equity (ROE) has increased significantly to 41.80% in the TTM from 13.82% in 2023, indicating better returns to shareholders. The equity ratio stands at 43.44% in the TTM, showing a slight improvement from 31.26% in 2023 and suggesting a stable capital structure.70
Positive
Cash Flow
The cash flow statement reveals some positive trends and challenges. The free cash flow growth rate has decreased by approximately 39.34% in the TTM, reflecting a drop in free cash flow generation. The operating cash flow to net income ratio is 0.36 in the TTM, which is relatively lower, suggesting challenges in converting income to cash. The free cash flow to net income ratio in the TTM is 0.28, indicating limited cash flow generation relative to net income.65
Positive
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 228.87M | 262.75M | 261.27M | 255.72M | 230.52M | 252.88M | Gross Profit |
| 45.91M | 55.48M | 51.01M | 47.52M | 45.19M | 49.25M | EBIT |
| 9.93M | 9.40M | 8.33M | 4.18M | 9.72M | 10.19M | EBITDA |
| 11.47M | 10.18M | 8.55M | 7.90M | 14.14M | 13.54M | Net Income Common Stockholders |
| 12.25M | 3.90M | 2.13M | 2.00M | 8.96M | 5.83M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 7.09M | 10.72M | 9.35M | 13.47M | 15.97M | 10.46M | Total Assets |
| 77.04M | 90.28M | 94.60M | 89.02M | 84.03M | 81.33M | Total Debt |
| 17.30M | 23.37M | 20.32M | 13.52M | 13.23M | 15.18M | Net Debt |
| 10.21M | 12.65M | 10.98M | 50.00K | -2.74M | 4.72M | Total Liabilities |
| 51.07M | 50.03M | 56.54M | 51.67M | 45.41M | 49.96M | Stockholders Equity |
| 17.05M | 28.23M | 22.43M | 19.75M | 22.16M | 18.95M |
| Cash Flow | Free Cash Flow | ||||
| 3.38M | 5.58M | -6.84M | 907.00K | 7.20M | 4.77M | Operating Cash Flow |
| 4.45M | 6.82M | -5.04M | 2.63M | 8.80M | 6.15M | Investing Cash Flow |
| 8.34M | -2.27M | -1.80M | -1.72M | -1.60M | -1.38M | Financing Cash Flow |
| -1.29M | -3.02M | 3.49M | 1.33M | 131.00K | -1.97M |
Spar Group Technical Analysis
Negative
1.36
Price Trends
1.83
Negative
2.03
Negative
2.11
Negative
Market Momentum
-0.14
Positive
12.31
Positive
8.29
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SGRP, the sentiment is Negative. The current price of 1.36 is below the 20-day moving average (MA) of 1.68, below the 50-day MA of 1.83, and below the 200-day MA of 2.11, indicating a bearish trend. The MACD of -0.14 indicates Positive momentum. The RSI at 12.31 is Positive, neither overbought nor oversold. The STOCH value of 8.29 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SGRP.
Spar Group Risk Analysis
Spar Group disclosed 16 risk factors in its most recent earnings report. Spar Group 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
Spar Group Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
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% | |
70 Outperform | $10.18B | 15.44 | 17.82% | 4.83% | -1.81% | -35.74% | |
67 Neutral | $31.82M | 2.65 | 45.55% | ― | -12.74% | 751.07% | |
63 Neutral | $8.80B | 12.83 | 16.04% | 6.10% | 4.34% | -59.80% | |
62 Neutral | $8.17B | 12.83 | 0.26% | 3.07% | 3.83% | -16.44% | |
45 Neutral | $515.86M | ― | -40.41% | ― | -15.17% | -567.89% |
* Industrials Sector Average
Performance Comparison
SGRP
Spar Group
1.36
0.35
34.65%
ACN
Accenture
324.33
-47.67
-12.81%
IPG
Interpublic Group of Companies
26.35
-4.91
-15.71%
OMC
Omnicom Group
80.01
-9.82
-10.93%
WPP
WPP
40.83
-1.63
-3.84%
ADV
Advantage Solutions
1.69
-2.36
-58.27%
Spar Group Earnings Call Summary
Earnings Call Date: Nov 12, 2024 | % Change Since: -43.33% | Next Earnings Date: Mar 27, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong performance in the core Americas segment and significant growth in net income, driven by strategic focus and successful acquisitions. However, revenue declines due to strategic exits and margin compression in the remodeling business pose challenges. Overall, the focus on core markets and strategic management indicates a positive outlook despite current challenges.Highlights
Strong Performance in the Americas
The Americas segment generated $54 million, marking a 3.8% increase compared to the prior year. The United States revenue was up 37% over last year, with the remodel business growing by 88% over last year in the second quarter.
Significant Growth in Net Income
Net income attributable to SPAR Group, Inc. for Q2 was $3.6 million or $0.15 per share, a significant increase from $639,000 or $0.03 per share in the year-ago quarter.
Successful Strategic Exits and Acquisitions
Completed the acquisition of the remaining 49% of Resource Plus, now owning 100% of all U.S. businesses. The strategic exit from South Africa, China, Australia, and NMS joint ventures resulted in 0 revenues from these entities, focusing on core markets.
Improved Gross Margin
Consolidated gross margin for the quarter was 19.2%, a 100 basis point improvement over the first quarter.
Reduction in SG&A Expenses
SG&A for the second quarter was $9.5 million, down $1.1 million from $10.6 million last year, indicating careful management of expenses.
Lowlights
Revenue Decline from Strategic Exits
Net revenues totaled $57.3 million, reflecting a decline from the prior year due to strategic exits from South Africa, China, Australia, and NMS joint ventures.
Gross Profit Margin Compression
Gross profit for the second quarter was $11 million or 19.2% of revenues compared to $13.1 million or 19.9% of revenue in the prior year quarter, due to a shift towards the remodeling business with higher costs.
Adjusted EBITDA Decline
Consolidated adjusted EBITDA was $1.9 million compared to $2.6 million in the prior year, indicating a decline in underlying profitability excluding one-time gains.
Company Guidance
During the SPAR Group's Q2 2024 earnings call, the company reported a consolidated revenue of $57.3 million, primarily driven by the Americas segment, which accounted for $54 million, marking a 3.8% increase from the prior year. The United States saw a 37% revenue increase, while Canada experienced a 14% rise, largely due to the recovery in the remodel business. The company's consolidated gross margin improved to 19.2%, reflecting a 100 basis point increase over the first quarter. Selling, general and administrative (SG&A) expenses were $9.5 million, down $1.1 million from the previous year, but represented a 60 basis point increase as a percentage of revenue. The company reported a consolidated EBITDA of $6.4 million, a significant increase from the prior year's $2.5 million, and net income attributable to SPAR was $3.6 million, or $0.15 per share. Additionally, the strategic exit from several international joint ventures and the acquisition of the remaining 49% of Resource Plus contributed to these results. The company emphasized its focus on growth in the U.S. and Canada, where it sees significant potential, supported by a strong financial position with total worldwide liquidity of $33.5 million as of June 30, 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.