Advantage Solutions (ADV) AI Stock Analysis

• Market Cap: $385.69M
• Dividend Yield: N/A
• Average Volume (3M): 808.05K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.77
• Revenue Growth: -15.17%
• EPS Growth: -567.89%
• Country: US
• Employees: 17,000
• Sector: Communication Services
• Sector Strength: 79
• Industry: Advertising Agencies
• EPS (TTM): -1.31
• Shares Outstanding: 321,408,840
• 10 Day Avg. Volume: 586,012
• 30 Day Avg. Volume: 808,055
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.15
• Price to Cash Flow (P/CF): 4.20
• P/FCF Ratio: 16.30
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $4.00
• Price Target Upside: 233.33% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

Advantage Solutions faces significant financial challenges, including declining revenues and negative profitability, which are major concerns. Technical indicators show bearish momentum, and the negative P/E ratio reflects poor valuation. The recent earnings call highlighted some operational improvements, but macroeconomic and market headwinds persist. A recent positive corporate event indicates potential for improved financial oversight, but the overall outlook remains cautious.

Positive Factors

Debt management

Advantage was active in 2024, voluntarily repurchasing ~$158mm of its outstanding debt while also buying back ~$34mm in common stock.

Financial performance

AEBITDA increased nearly 9% driven by efficiency gains across all three segments as well as good event momentum in Experiential.

Revenue growth

The company's Q3 results showed 2% organic revenue growth, highlighting strength in Experiential and Retail services despite macroeconomic pressures.

Negative Factors

Capital expenditure

Lower capex spend benefits this year are expected to reverse, potentially impacting future financial performance.

Future financial outlook

Working capital timing benefits and lower capex spend this year will likely reverse in 2025, with the company guiding to FCF conversion dropping into the mid-50% range.

Advantage Solutions Business Overview & Revenue Model

Company Description

Advantage Solutions Inc. provides outsourced solutions to consumer goods companies and retailers in North America and internationally. It operates in two segments, Sales and Marketing. The Sales segment offers brand-centric services, such as headquarter relationship management; analytics, insights, and intelligence; administration; and brand-centric merchandising services. This segment also provides retailer-centric services comprising retailer-centric merchandising, in-store media, and digital commerce. The Marketing segment offers brand-centric services, including shopper and consumer marketing, and brand experiential services; and retailer-centric services, such as retail experiential, private label, digital marketing, and digital media and advertising. The company was formerly known as Karman Holding Corp. and changed its name to Advantage Solutions Inc. in March 2016. Advantage Solutions Inc. was founded in 1987 and is headquartered in Irvine, California.

How the Company Makes Money

Advantage Solutions generates revenue primarily through service fees charged to its clients, which include CPG manufacturers and retailers. The company earns money by providing outsourced sales and marketing services, which help clients increase their market presence and drive sales. Key revenue streams include fees for retail merchandising, sales representation, marketing services, and digital commerce solutions. Additionally, Advantage Solutions may benefit from performance-based incentives tied to the achievement of specific sales targets or marketing objectives established in client agreements. Strategic partnerships with leading brands and retailers also play a significant role in sustaining and growing the company's revenue.

Advantage Solutions Financial Statement Overview

Summary

Advantage Solutions is experiencing financial difficulties, with declining revenues and profitability. The income statement shows negative net profit margins and a significant revenue decline. The balance sheet reflects improved debt-to-equity ratios but negative returns on equity. Cash flow remains positive, showing some resilience, yet operating cash flow challenges persist.

Income Statement

Advantage Solutions has faced challenges with declining revenues and negative net income over recent years. Gross profit margin stands at 14.22%, indicating a decline in core profitability. The net profit margin is negative at -9.17%, reflecting consistent losses. Revenue decreased by approximately 15.61% from the previous period, highlighting a concerning downward trend. EBIT and EBITDA margins also suffered, with both being negative, suggesting operational inefficiencies.

Balance Sheet

The company's debt-to-equity ratio has improved significantly, standing at 0.02, reflecting reduced leverage risk. However, the return on equity is negative at -43.66%, due to continued net losses, impacting shareholder returns. The equity ratio is 24.09%, suggesting a moderate level of financial stability, despite the declining asset base.

Cash Flow

Free cash flow has decreased but remains positive at $85.26 million, showing some resilience. The operating cash flow to net income ratio is negative, indicating cash flow challenges in covering net losses. However, the company has managed to maintain positive free cash flow to net income ratio, suggesting some efficiency in cash management.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
3.57B	4.22B	4.05B	3.60B	3.16B
	Gross Profit
507.27M	564.38M	556.56M	638.17M	604.19M
	EBIT
-294.98M	76.19M	133.12M	230.05M	67.01M
	EBITDA
-89.85M	301.17M	-1.14B	469.13M	277.84M
	Net Income Common Stockholders
-326.96M	-63.26M	-1.38B	54.49M	-161.71M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
205.23M	142.84M	120.72M	164.62M	204.30M
	Total Assets
3.11B	3.78B	4.26B	5.85B	5.78B
	Total Debt
13.25M	1.92B	2.11B	2.10B	2.16B
	Net Debt
-191.98M	1.79B	1.99B	1.94B	1.96B
	Total Liabilities
2.36B	2.68B	3.03B	3.27B	3.24B
	Stockholders Equity
748.74M	1.11B	1.12B	2.48B	2.44B
Cash Flow		Free Cash Flow
85.26M	192.72M	80.80M	94.82M	314.78M
	Operating Cash Flow
93.09M	239.00M	121.26M	125.99M	345.73M
	Investing Cash Flow
206.45M	-55.22M	-113.54M	-75.84M	-99.00M
	Financing Cash Flow
-211.42M	-181.34M	-41.64M	-86.30M	-230.15M

Advantage Solutions Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1.20
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ADV, the sentiment is Negative. The current price of 1.2 is below the 20-day moving average (MA) of 1.47, below the 50-day MA of 2.04, and below the 200-day MA of 3.03, indicating a bearish trend. The MACD of -0.23 indicates Negative momentum. The RSI at 32.61 is Neutral, neither overbought nor oversold. The STOCH value of 37.80 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ADV.

Advantage Solutions Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DLX	66 Neutral	$653.32M	12.38	8.61%	8.21%	-3.22%	99.58%
BOC	61 Neutral	$449.03M	―	-0.24%	―	12.49%	82.27%
Sector *	58 Neutral	$26.25B	2.79	-10.85%	4.33%	2.15%	-44.22%
NCMI	50 Neutral	$549.26M	―	-5.27%	0.52%	45.67%	-100.72%
ADV	44 Neutral	$385.69M	―	-40.41%	―	-15.17%	-567.89%
VSME	40 Underperform	$4.04M	―	-157.27%	―	―	―
CCO	34 Underperform	$504.76M	―	4.92%	―	-13.48%	55.39%

Advantage Solutions Corporate Events

Advantage Solutions Appoints New Chief Accounting Officer

Advantage Solutions Inc. has appointed Daniel Gore as its new Chief Accounting Officer and principal accounting officer, effective March 24, 2025. Mr. Gore brings extensive financial leadership experience from his previous roles at 8th Avenue Food & Provisions and Benson Hill. His appointment replaces Christopher Growe, who will continue as the Chief Financial Officer. The move is expected to strengthen the company’s financial management capabilities.