tiprankstipranks
Trending News
More News >
Aterian (ATER)
NASDAQ:ATER
US Market

Aterian (ATER) AI Stock Analysis

Compare
854 Followers

Top Page

AT

Aterian

(NASDAQ:ATER)

Rating:48Neutral
Price Target:
$1.50
▲(7.14%Upside)
Aterian's overall stock score is negatively impacted by weak financial performance and bearish technical signals. The company's strategic initiatives to reduce costs and diversify manufacturing are positive but have yet to translate into financial improvements. The valuation metrics reflect ongoing profitability issues, making the stock less attractive in its current state.
Positive Factors
Financial Performance
ATER reached EBITDA breakeven a quarter ahead of plan.
Product Expansion
Plans to expand its omnichannel footprint hold promise with ATER poised to launch on Target's Target Plus marketplace and other brick & mortar stores possible.
Negative Factors
Consumer Environment
The general consumer environment looks uncertain as inflation could re-emerge and interest rates could be stickier than anticipated.
Market Competition
The consumer environment is still difficult and the Amazon Marketplace is highly competitive.
Tariffs and Sourcing
Higher tariffs look highly likely and ATER sources the large majority of its product from China.

Aterian (ATER) vs. SPDR S&P 500 ETF (SPY)

Aterian Business Overview & Revenue Model

Company DescriptionAterian, Inc. (ATER) is a technology-enabled consumer products company that leverages proprietary software and data analytics to streamline the process of designing, manufacturing, marketing, and selling products online. The company primarily operates in the e-commerce sector, offering a diverse range of consumer goods across various categories such as home and kitchen, health and wellness, and beauty and personal care. Aterian utilizes a platform-based approach to identify market opportunities and rapidly bring high-demand products to market through online channels, particularly on Amazon and other e-commerce platforms.
How the Company Makes MoneyAterian generates revenue through the sale of consumer products across multiple online retail platforms, with a significant portion of its sales occurring on Amazon. The company employs a data-driven model to identify trending products and optimize their production and marketing strategies, which allows them to efficiently capture market demand. Aterian's key revenue streams include direct sales of its branded products, as well as strategic partnerships and collaborations that enhance its product offerings. Additionally, the company benefits from economies of scale and operational efficiencies afforded by its proprietary technology platform, which enhances its profitability by reducing costs and improving product margins.

Aterian Earnings Call Summary

Earnings Call Date:May 14, 2025
(Q1-2025)
|
% Change Since: -33.65%|
Next Earnings Date:Aug 11, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture, with significant challenges from tariffs and revenue declines but also proactive strategic shifts in cost reduction and product diversification. The company is committed to long-term growth and has taken decisive steps to mitigate near-term challenges.
Q1-2025 Updates
Positive Updates
Cost Reduction Initiatives
The company announced a fixed cost reduction initiative targeting $5 million to $6 million in annualized savings, with most savings coming from headcount reductions.
Shift in Manufacturing Strategy
Aterian is accelerating its plan to reshore and diversify manufacturing, with a goal to produce more than 30% of its goods outside China by the end of 2025.
Product Diversification
The company plans to deepen its expansion into consumable products which are predominantly exempt from tariffs, with new product launches expected in late Q3 2025.
Improvement in Operating Loss
Operating loss for Q1 2025 narrowed to $3.7 million from a loss of $5.3 million in the year-ago quarter, an improvement of approximately 30%.
Negative Updates
Revenue Decline
Net revenue for the first quarter of 2025 declined 24% to $15.4 million from $20.2 million in Q1 2024.
Impact of Tariffs
Tariffs on Chinese imports significantly impacted the company, with rates peaking at 145% before settling at 30%, causing ongoing volatility and uncertainty.
Withdrawal of Guidance
Due to current volatility and uncertainty, Aterian has withdrawn its previously issued 2025 outlook as well as its three-year CAGR objective.
Gross Margin Decrease
Overall gross margin for Q1 2025 decreased to 61.4% from 65.1% in the year-ago quarter, primarily due to product mix changes.
Company Guidance
During Aterian Inc.'s Q1 2025 earnings call, the company provided guidance reflecting the impact of recent macroeconomic changes, particularly the global trade policy shifts. The fiscal quarter saw a decline in net revenue to $15.4 million from $20.2 million in Q1 2024, attributed to SKU rationalization and reduced Amazon traffic. The adjusted EBITDA loss slightly improved to $2.5 million from $2.6 million. In response to increased tariffs, Aterian plans to accelerate its manufacturing diversification, with a target to produce over 30% of goods in China by the end of 2025, down from the previous target of below 40% by the second half of 2026. The company is also advancing into consumables, implementing strategic price increases, and initiating a cost reduction plan targeting $5 million to $6 million in annualized savings. Despite challenges, Aterian expects to navigate 2025 without raising equity capital, although it withdrew its previous financial guidance due to ongoing volatility.

Aterian Financial Statement Overview

Summary
Aterian faces substantial profitability challenges with declining revenues and negative profit margins. The balance sheet shows moderate debt levels and positive equity, but net losses continue to affect financial health. Positive cash flow trends provide some relief, yet operational inefficiencies persist.
Income Statement
45
Neutral
The company has faced declining revenues over recent years, with a significant drop from 2019 to 2024. Gross profit margin stands at 62.0% for 2024, indicating a strong ability to convert revenue into gross profit, yet the net profit margin is deeply negative at -12.0%, reflecting continued net losses. EBIT and EBITDA margins are also negative, suggesting operating challenges. Overall, profitability remains a significant concern.
Balance Sheet
55
Neutral
Aterian's balance sheet shows a manageable debt-to-equity ratio of 0.25 in 2024, indicating a moderate level of debt relative to equity. Stockholders' equity has decreased from 2021, but the company maintains a positive equity ratio of 60.6%, suggesting reasonable financial stability. The return on equity is negative due to losses, pointing to inefficiencies in generating returns on shareholder investment.
Cash Flow
50
Neutral
The cash flow statement shows improvement with positive free cash flow of $2.12 million in 2024, a turnaround from negative flows in previous years. Operating cash flow is positive, yet the ratio of operating cash flow to net income indicates a challenge in converting earnings into cash. Free cash flow to net income is also negative, reflecting underlying profitability issues.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
94.19M99.05M142.57M221.17M247.77M185.70M
Gross Profit
57.75M61.49M70.28M105.52M121.86M84.75M
EBIT
-10.24M-11.82M-76.19M-59.87M-59.14M-22.02M
EBITDA
-8.00M-9.00M-69.42M-186.45M-214.92M-57.49M
Net Income Common Stockholders
-10.60M-11.86M-74.56M-196.29M-234.72M-63.13M
Balance SheetCash, Cash Equivalents and Short-Term Investments
14.34M18.00M20.02M43.57M30.32M26.72M
Total Assets
49.82M49.54M61.87M156.44M312.09M157.45M
Total Debt
0.007.41M12.15M22.75M40.42M86.50M
Net Debt
-14.34M-10.58M-7.88M-20.83M10.11M59.79M
Total Liabilities
22.78M19.52M25.84M54.49M86.56M134.07M
Stockholders Equity
27.04M30.02M36.03M101.95M225.53M23.38M
Cash FlowFree Cash Flow
2.17M2.12M-13.51M-17.56M-42.00M5.01M
Operating Cash Flow
2.17M2.17M-13.39M-17.48M-41.97M5.10M
Investing Cash Flow
-6.00K-242.00K-244.00K-677.00K-44.91M-39.05M
Financing Cash Flow
-2.28M-4.91M-11.11M27.00M95.57M33.31M

Aterian Technical Analysis

Technical Analysis Sentiment
Negative
Last Price1.40
Price Trends
50DMA
1.83
Negative
100DMA
2.01
Negative
200DMA
2.40
Negative
Market Momentum
MACD
-0.13
Positive
RSI
26.95
Positive
STOCH
8.22
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ATER, the sentiment is Negative. The current price of 1.4 is below the 20-day moving average (MA) of 1.71, below the 50-day MA of 1.83, and below the 200-day MA of 2.40, indicating a bearish trend. The MACD of -0.13 indicates Positive momentum. The RSI at 26.95 is Positive, neither overbought nor oversold. The STOCH value of 8.22 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ATER.

Aterian Risk Analysis

Aterian disclosed 26 risk factors in its most recent earnings report. Aterian 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

Aterian Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
62
Neutral
$6.94B11.292.95%3.87%2.70%-24.49%
NTNTZ
48
Neutral
$47.32M-25.01%-2.91%3.98%
48
Neutral
$12.78M-35.33%-26.36%82.23%
47
Neutral
$84.54M-199.78%-10.41%53.85%
42
Neutral
$101.09M-237.51%-27.44%-2.92%
42
Neutral
$13.66M-131.84%-12.63%61.30%
NCNCL
42
Neutral
$108.83M-298.04%47.13%-49.61%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
ATER
Aterian
1.38
-1.27
-47.92%
IRBT
iRobot
3.35
-6.64
-66.47%
NTZ
Natuzzi SPA
4.15
-0.95
-18.63%
PRPL
Purple Innovation
0.77
-0.40
-34.19%
NVFY
Nova Lifestyle
1.11
-0.72
-39.34%
NCL
Northann Corp.
1.35
0.96
246.15%

Aterian Corporate Events

Business Operations and StrategyFinancial Disclosures
Aterian Announces Workforce Reduction and Cost Optimization Plan
Negative
May 14, 2025

On May 14, 2025, Aterian announced a fixed cost reduction plan, including a workforce reduction affecting around 20 employees, expected to be completed by the end of Q3 2025. The plan anticipates restructuring charges of approximately $2.3 million, primarily for severance, with payments extending through Q2 2026. Additionally, Aterian reported its Q1 2025 financial results, highlighting a net revenue decrease to $15.4 million from $20.2 million due to SKU rationalization and changes in Amazon’s affiliate market program. Despite these challenges, the company is implementing a cost optimization plan to save $5-$6 million annually and mitigate tariff impacts, aiming to enhance its business model by diversifying manufacturing and expanding into US-made consumables.

The most recent analyst rating on (ATER) stock is a Buy with a $4.00 price target. To see the full list of analyst forecasts on Aterian stock, see the ATER Stock Forecast page.

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.