Unifi (UFI) AI Stock Analysis

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Unifi

(NYSE:UFI)

47Neutral

Unifi's overall stock score reflects significant financial and valuation challenges, with declining revenues, operational inefficiencies, and liquidity concerns. While technical indicators and earnings call sentiment provide some neutral to positive signals, these are insufficient to outweigh the fundamental financial issues. The company's strategic initiatives offer potential future growth but face immediate economic pressures and restructuring costs.

Unifi (UFI) vs. S&P 500 (SPY)

Market Cap

$86.07M

Dividend YieldN/A

Average Volume (3M)54.50K

Price to Earnings (P/E)―

Beta (1Y)0.70

Revenue Growth1.57%

EPS Growth38.38%

CountryUS

Employees2,700

SectorConsumer Cyclical

Sector Strength64

IndustryApparel - Manufacturers

Share Statistics

EPS (TTM)-1.82

Shares Outstanding18,351,295

10 Day Avg. Volume56,049

30 Day Avg. Volume54,503

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.15

Price to Cash Flow (P/CF)-10.60

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

$12.00

Price Target Upside158.62% Upside

Rating ConsensusHold

Number of Analyst Covering1

Unifi Business Overview & Revenue Model

Company DescriptionUnifi, Inc., together with its subsidiaries, engages in the manufacture and sale of recycled and synthetic products in the United States, Brazil, China, and internationally. It operates in four segments: Polyester, Nylon, Brazil, and Asia. The Polyester segment offers partially oriented, textured, solution and package dyed, twisted, beamed, and draw wound yarns; and pre-consumer and post-consumer waste products, including plastic bottle flakes, polyester polymer, and staple fiber beads to other yarn manufacturers, and knitters and weavers that produce yarn and/or fabric for the apparel, hosiery, home furnishings, automotive, industrial, and other end-use markets. The Nylon segment provides virgin or recycled textured, solution dyed, and spandex covered yarns to knitters and weavers that produce fabric primarily for the apparel, hosiery, medical markets. The Brazil segment manufactures and sells polyester-based products to knitters and weavers that produce fabric for the apparel, home furnishings, automotive, industrial, and other end-use markets. The Asia segment primarily sells polyester-based products to knitters and weavers that produce fabric for the apparel, home furnishings, automotive, industrial, and other end-use markets. The company sells its products through sales force and independent sales agents under the REPREVE and PROFIBER brands. Unifi, Inc. was incorporated in 1969 and is headquartered in Greensboro, North Carolina.

How the Company Makes MoneyUnifi makes money primarily through the sale of its specialized yarns, with a significant portion of its revenue derived from its flagship REPREVE® line. The company's revenue model is centered around manufacturing and distributing these yarns to major textile manufacturers and brands. Unifi's key revenue streams include the sale of recycled polyester and nylon yarns, which are used in a wide array of consumer products such as clothing, automotive interiors, and home furnishings. Strategic partnerships with leading brands that prioritize sustainability contribute significantly to Unifi's earnings, as these collaborations often drive demand for eco-friendly materials. Additionally, Unifi benefits from its global manufacturing and distribution capabilities, allowing it to efficiently serve a diverse international customer base.

Unifi Financial Statement Overview

Summary

Unifi is facing financial challenges marked by declining revenues, persistent losses, and cash flow issues. The income statement reflects a negative trajectory with operational inefficiencies, while the balance sheet shows increased leverage posing risks. Cash flow is a concern due to negative free cash flow and declining trends, highlighting liquidity issues.

Income Statement

Neutral

Unifi's income statement shows significant challenges, with a declining revenue trend from 2022 to TTM 2024. The gross profit margin has decreased substantially, and both EBIT and EBITDA margins are negative, indicating operational inefficiencies. The net profit margin is also negative, highlighting ongoing losses. These factors contribute to a low score.

Balance Sheet

Neutral

The balance sheet reveals a moderate financial position. The debt-to-equity ratio has increased over time, indicating higher leverage, which poses a potential risk. However, the company's equity ratio remains reasonable, showing a stable equity base. The return on equity is negative due to continued losses, affecting the overall score.

Cash Flow

Negative

Unifi's cash flow situation is concerning, with negative free cash flow and a declining operating cash flow trend. The free cash flow growth rate is negative, and both the operating cash flow to net income and free cash flow to net income ratios are unfavorable. These issues reflect liquidity challenges, resulting in a low score.

TTM	Jun 2024	Sep 2023	Sep 2022	Jun 2021	Jun 2020
Breakdown
Income Statement		Total Revenue
592.70M	582.21M	623.53M	815.76M	667.59M	606.51M
	Gross Profit
25.07M	16.62M	14.24M	80.48M	93.49M	39.04M
	EBIT
-18.33M	-37.42M	-40.87M	28.60M	38.61M	-8.58M
	EBITDA
8.35M	-8.16M	-10.85M	55.90M	76.31M	-28.08M
	Net Income Common Stockholders
-33.30M	-47.40M	-46.34M	15.17M	29.07M	-57.24M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
52.50M	26.80M	46.96M	53.29M	78.25M	75.27M
	Total Assets
497.03M	469.24M	538.82M	588.72M	555.37M	474.16M
	Total Debt
180.91M	138.44M	148.57M	122.96M	95.27M	107.20M
	Net Debt
128.41M	111.64M	101.61M	69.67M	17.02M	31.94M
	Total Liabilities
241.76M	205.86M	215.21M	227.27M	196.95M	158.01M
	Stockholders Equity
255.27M	263.38M	323.61M	361.45M	358.42M	316.15M
Cash Flow		Free Cash Flow
-25.58M	-9.10M	-31.69M	-39.25M	11.90M	34.22M
	Operating Cash Flow
-15.43M	2.09M	4.74M	380.00K	36.68M	52.72M
	Investing Cash Flow
-2.03M	-10.67M	-36.23M	-41.73M	-24.62M	41.57M
	Financing Cash Flow
2.16M	-10.61M	25.94M	17.96M	-12.88M	-37.92M

Unifi Technical Analysis

Technical Analysis Sentiment

Negative

Last Price4.64

Price Trends

50DMA

5.27

Negative

100DMA

5.52

Negative

200DMA

5.95

Negative

Market Momentum

MACD

-0.22

Positive

RSI

37.01

Neutral

STOCH

17.47

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For UFI, the sentiment is Negative. The current price of 4.64 is below the 20-day moving average (MA) of 4.78, below the 50-day MA of 5.27, and below the 200-day MA of 5.95, indicating a bearish trend. The MACD of -0.22 indicates Positive momentum. The RSI at 37.01 is Neutral, neither overbought nor oversold. The STOCH value of 17.47 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for UFI.

Unifi Risk Analysis

Unifi disclosed 16 risk factors in its most recent earnings report. Unifi reported the most risks in the “Macro & Political” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Unifi Peers Comparison

Overall Rating

UnderperformOutperform

Sector (59)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MAT	73 Outperform	$4.77B	9.44	24.55%	―	-1.13%	163.15%
PLYA	72 Outperform	$1.71B	24.63	14.24%	―	-3.87%	60.57%
HAS	68 Neutral	$7.28B	18.93	34.75%	4.04%	-17.28%	―
KTB	67 Neutral	$3.16B	13.10	63.68%	3.56%	0.07%	7.19%
Sector *	59 Neutral	$11.48B	10.33	-0.84%	4.02%	1.25%	-16.06%
NWL	48 Neutral	$1.97B	―	-7.37%	5.93%	-6.77%	44.59%
UFI	47 Neutral	$86.07M	―	-12.60%	―	1.57%	38.38%

* Consumer Cyclical Sector Average

Performance Comparison

UFI

Unifi

4.64

-1.14

-19.72%

HAS

Hasbro

52.04

-1.16

-2.18%

MAT

Mattel

15.04

-3.05

-16.86%

NWL

Newell Brands

4.72

-2.13

-31.09%

PLYA

Playa Hotels & Resorts

13.38

4.17

45.28%

KTB

Kontoor Brands

57.34

4.84

9.22%

Unifi Earnings Call Summary

Earnings Call Date: Feb 5, 2025 | % Change Since: -25.64% | Next Earnings Date: Apr 30, 2025

Earnings Call Sentiment Neutral

The earnings call reflects cautious optimism with improvements in revenue trends and strategic initiatives in new markets like military and carpet segments. However, challenges remain with sluggish sales and economic pressures in Asia. Strategic decisions like the closing of the Madison facility aim to improve cost structure and profitability. The sentiment is balanced with both positive initiatives and existing challenges.

Highlights

Improvement in Revenue Trends

Starting January, there has been an improvement in revenue trends, with customers optimistic about demand and inventories improving post-holiday season.

Beyond Apparel Initiatives

The company is entering new markets with sales in the carpet and military segments, supported by a 'made in America' approach. Initial sales are expected in Q4 of this fiscal year.

Growth in Brazil Segment

Brazil continues to perform well, thanks to increased demand for textured polyester and favorable pricing dynamics.

Strategic Manufacturing Consolidation

The decision to close the Madison facility will improve cost structure and operational performance, enhancing profitability.

REPREVE Marketing Success

REPREVE fiber products have gained traction through co-branding initiatives with brands like The North Face and New Balance.

Lowlights

Sluggish Sales Performance

Revenues were below projections due to lower than expected sales in the Americas and Asia.

Challenges in Asia

Continued headwinds in Asia due to unfavorable economic conditions and pricing pressures in China.

Impact of Tariffs

Recent tariff announcements on Canada and Mexico create uncertainty, with potential impacts on business not yet clear.

Decrease in REPREVE Sales

REPREVE represented 31.31% of sales, a slight decrease compared to the previous year, due to macroeconomic pressures in China.

Company Guidance

During the second quarter fiscal 2025 earnings call, Unifi, Inc. provided guidance indicating optimism for the remainder of the fiscal year despite facing sluggish sales and economic challenges in North America and Asia. The company reported consolidated net sales of $138.9 million, a 1.4% year-over-year increase, driven primarily by improvements in the Americas and robust sales in Brazil, although Asia experienced a decline of approximately 7%. The REPREVE segment accounted for 31.31% of sales, with expectations for improvement in the second half of the year. The closure of the Madison, North Carolina manufacturing facility is anticipated to enhance cost structures and operational efficiency, with expected restructuring charges ranging from $5 million to $7.5 million. Unifi, Inc. also highlighted strategic initiatives in the beyond apparel sector, particularly in military and carpet markets, and forecasted continued growth in these areas into fiscal 2026. The company expects net sales to align with fiscal 2024, with profitability metrics improving year over year, despite manufacturing transition costs. Capital expenditures are projected between $14 million and $16 million, focused on strategic investments in high-growth opportunities.

Unifi Corporate Events

Business Operations and StrategyFinancial Disclosures

Unifi Announces Facility Closure and Reports Q2 Loss

Negative

Feb 5, 2025

On February 3, 2025, Unifi, Inc. announced the closure of its Madison, North Carolina facility as part of a consolidation strategy to enhance efficiency by relocating operations to other facilities in North and Central America. This move will result in up to 250 job losses and incur restructuring charges estimated between $5.0 million and $7.5 million. UNIFI released its second fiscal quarter results for the period ending December 29, 2024, showing a net loss of $11.4 million compared to a $19.8 million loss in the previous year. Despite a slight increase in net sales to $138.9 million, gross profit decreased due to adverse sales mix and pricing dynamics. The company is optimistic about future growth, driven by sustainable product demand and operational optimization, aiming to improve profitability and shareholder value.

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.