Brilliant Earth Group (BRLT) AI Stock Analysis

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Brilliant Earth Group

(NASDAQ:BRLT)

Rating:46Neutral

Price Target:

$1.50

▲( 7.91% Upside)

Brilliant Earth's overall stock score reflects financial challenges and bearish technical indicators, with some positive aspects from strategic initiatives in fine jewelry and marketing. The negative P/E ratio due to losses and lack of dividend yield also weigh on the score. Financial performance is the most significant factor, highlighting the need for improved cost management and revenue growth.

Positive Factors

Financial Position

Balance sheet strengths include a $93 million net cash position and plans to pre-pay $20 million of BRLT's term loan, which should yield annualized interest savings.

Revenue Growth

The anticipated mid- to high-single-digit revenue growth rate should benefit from easier comparisons and growth of showrooms and strength in the fine jewelry category.

Negative Factors

Cost Pressures

Higher gold costs and tariffs remain a risk to gross margin, although BRLT has limited direct exposure to China.

Market Sentiment

The largest risk to shares is the ongoing faith necessary to buy into the longer-term setup, which is likely to weigh on sentiment further if it drags on.

Brilliant Earth Group (BRLT) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$138.04M

Dividend YieldN/A

Average Volume (3M)43.20K

Price to Earnings (P/E)―

Beta (1Y)1.06

Revenue Growth-6.12%

EPS Growth-105.56%

CountryUS

Employees756

SectorConsumer Cyclical

Sector Strength72

IndustryLuxury Goods

Share Statistics

EPS (TTM)0.00

Shares Outstanding14,352,321

10 Day Avg. Volume54,069

30 Day Avg. Volume43,200

Financial Highlights & Ratios

PEG Ratio-0.11

Price to Book (P/B)<0.01

Price to Sales (P/S)0.00

P/FCF Ratio11.99

Enterprise Value/Market Cap0.63

Enterprise Value/Revenue0.05

Enterprise Value/Gross Profit0.34

Enterprise Value/Ebitda1.78

Forecast

1Y Price Target

$2.00

Price Target Upside43.88% Upside

Rating ConsensusHold

Number of Analyst Covering4

Brilliant Earth Group Business Overview & Revenue Model

Company DescriptionBrilliant Earth Group, Inc. engages in the design, procurement, and retail sale of diamonds, gemstones, and jewelry in the United States and internationally. Its product assortment and merchandise include a collection of diamond engagement rings, wedding and anniversary rings, gemstone rings, and fine jewelry. The company sells directly to consumers through its omnichannel sales platform, including e-commerce and showrooms. As of December 31, 2021, it had 15 showrooms. The company was founded in 2005 and is headquartered in San Francisco, California.

How the Company Makes MoneyBrilliant Earth Group makes money primarily through the sale of fine jewelry, including engagement rings, wedding bands, and other jewelry products. The company's revenue model is centered around direct-to-consumer sales both through its e-commerce platform and physical showrooms. Key revenue streams include the sale of custom-designed jewelry and ready-made pieces, leveraging their strong brand reputation for ethical sourcing and sustainability. Partnerships with suppliers of ethically sourced diamonds and recycled metals also contribute to their value proposition, enhancing their product offerings and market appeal. Additionally, Brilliant Earth may engage in strategic marketing alliances and collaborations to boost their reach and sales.

Brilliant Earth Group Financial Statement Overview

Summary

Brilliant Earth Group exhibits a mixed financial health profile. Revenue growth and gross profit margins are strong points, showing potential in the company's market position. However, profitability metrics and high leverage present risks that need to be managed carefully. Improvements in cash flow management are positive, but consistency in profitability and reduction in leverage are essential for long-term stability and growth in the retail discretionary industry.

Income Statement

Positive

Brilliant Earth Group shows a positive trend in revenue growth over the years, with a noticeable revenue increase from 2020 to 2024. Gross profit margins are strong, suggesting efficient cost management. However, the net profit margin is inconsistent, fluctuating over the years, indicating challenges in managing operating expenses and other costs. EBIT and EBITDA margins have been volatile, reflecting operational inefficiencies that need addressing to stabilize profitability.

Balance Sheet

Neutral

The company's equity position has improved from negative in earlier years to positive in recent periods, showcasing a strengthening financial base. However, the debt-to-equity ratio remains high, highlighting reliance on debt funding. The equity ratio remains low, indicating a potential risk if business conditions deteriorate. ROE has vastly improved, but remains inconsistent, suggesting the company is still stabilizing its returns on equity.

Cash Flow

Positive

Brilliant Earth Group's cash flow statements indicate strong free cash flow growth from 2020 to 2024, signifying effective cash management and operational improvements. The operating cash flow to net income ratio is favorable, indicating good cash conversion. However, the free cash flow to net income ratio is inconsistent, suggesting fluctuations in capital expenditure or cash operational efficiencies that need addressing.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
422.16M	446.38M	439.88M	380.19M	251.82M
	Gross Profit
254.40M	257.00M	234.29M	187.42M	112.30M
	EBIT
3.35M	4.48M	23.33M	40.13M	26.59M
	EBITDA
14.50M	13.63M	28.67M	40.99M	27.16M
	Net Income Common Stockholders
541.00K	584.00K	19.02M	1.53M	21.58M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
161.93M	155.81M	154.65M	172.87M	66.27M
	Total Assets
281.25M	273.58M	262.57M	217.73M	85.22M
	Total Debt
97.66M	100.20M	95.12M	63.58M	62.21M
	Net Debt
-64.26M	-55.61M	-59.53M	-109.29M	-4.06M
	Total Liabilities
171.86M	176.13M	169.43M	134.89M	170.61M
	Stockholders Equity
15.33M	12.53M	10.93M	8.40M	-85.39M
Cash Flow		Free Cash Flow
12.69M	14.27M	5.38M	40.47M	26.14M
	Operating Cash Flow
17.59M	26.21M	14.51M	46.08M	26.72M
	Investing Cash Flow
-4.91M	-11.94M	-9.12M	-5.61M	-584.00K
	Financing Cash Flow
-6.57M	-13.10M	-23.60M	66.12M	-263.00K

Brilliant Earth Group Technical Analysis

Technical Analysis Sentiment

Negative

Last Price1.39

Price Trends

50DMA

1.50

Negative

100DMA

1.59

Negative

200DMA

1.76

Negative

Market Momentum

MACD

-0.03

Positive

RSI

41.70

Neutral

STOCH

23.33

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BRLT, the sentiment is Negative. The current price of 1.39 is below the 20-day moving average (MA) of 1.49, below the 50-day MA of 1.50, and below the 200-day MA of 1.76, indicating a bearish trend. The MACD of -0.03 indicates Positive momentum. The RSI at 41.70 is Neutral, neither overbought nor oversold. The STOCH value of 23.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BRLT.

Brilliant Earth Group Risk Analysis

Brilliant Earth Group disclosed 64 risk factors in its most recent earnings report. Brilliant Earth 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 1 New Risks

Our business is affected by seasonality and any negative impact on consumer spending during peak shopping quarters could materially adversely affect our business, financial condition and results of operations. Q4, 2024

Brilliant Earth 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
Sector *	62 Neutral	$6.88B	11.26	2.78%	3.93%	2.65%	-22.00%
RENT	54 Neutral	$26.16M	―	47.49%	―	2.68%	43.98%
BRLT	46 Neutral	$138.04M	―	-0.45%	―	-6.12%	-105.56%
LESL	46 Neutral	$161.58M	―	12.90%	―	-6.12%	-396.11%
LVLU	44 Neutral	$15.93M	―	-179.00%	―	-11.33%	-183.48%
DTCB	42 Neutral	$5.63M	―	-67.84%	―	-9.23%	-3.69%
VRA	41 Neutral	$59.19M	―	-28.34%	―	-20.99%	-976.24%

* Consumer Cyclical Sector Average

Performance Comparison

BRLT

Brilliant Earth Group

1.39

-0.87

-38.50%

VRA

Vera Bradley

2.14

-5.51

-72.03%

LESL

Leslie's

0.82

-4.20

-83.67%

RENT

Rent the Runway

6.19

-23.56

-79.19%

DTCB

Solo Brands

0.08

-1.88

-95.92%

LVLU

Lulu's Fashion Lounge Holdings

0.40

-1.58

-79.80%

Brilliant Earth Group Earnings Call Summary

Earnings Call Date:May 06, 2025

(Q1-2025)

% Change Since: -10.32%|

Next Earnings Date:Aug 07, 2025

Earnings Call Sentiment Neutral

The earnings call reflects a mixed sentiment. While Brilliant Earth continues to maintain profitability and shows growth in orders and fine jewelry, it faces challenges with a decline in net sales, average order value, and gross margin. The strategic initiatives in fine jewelry and strong marketing campaigns are positive, but the financial downsides suggest a need for cautious optimism.

Q1-2025 Updates

Positive Updates

Consistent Profitability

Brilliant Earth marked its 15th consecutive quarter of profitability as a public company, showcasing a disciplined approach to managing expenses.

Increase in Total and Repeat Orders

Total orders grew 12% year-over-year and repeat orders grew 13% year-over-year, indicating strong customer retention and brand resonance.

Fine Jewelry Expansion

Fine jewelry bookings represented 14% of total bookings, a 350 basis point expansion over Q1 last year, with strong double-digit growth.

Successful Valentine's Day Campaign

The Valentine's Day campaign resulted in the strongest period ever with total bookings up mid-to-high single digits year-over-year and fine jewelry bookings growing over 40% year-over-year.

Social Media Impact

Partnerships with influencers led to 6.2 million social media impressions, strengthening brand presence.

Negative Updates

Decline in Net Sales

Net sales for Q1 were $93.9 million, a 3.5% decline year-over-year, indicating challenges in achieving revenue growth.

Decrease in Average Order Value

Average order value (AOV) was $2,062 in Q1, a decline of 14.2% year-over-year, primarily due to strong performance in lower-priced bridal ranges.

Gross Margin Decline

Q1 gross margin was 58.6%, a 130 basis point decline year-over-year, affected by higher gold costs and labor and occupancy expenses.

Increased Operating Expenses

Q1 operating expense was 62.4% of net sales, up from 59.0% in Q1 2024, reflecting higher marketing and employee costs.

Company Guidance

In the first quarter of 2025, Brilliant Earth reported net sales of $93.9 million, representing a 3.5% decline year-over-year, while achieving a 1% adjusted EBITDA margin with $1.1 million in adjusted EBITDA. Despite a 14.2% decrease in average order value (AOV) to $2,062, total orders grew 12%, and repeat orders increased by 13% year-over-year. The company's fine jewelry segment saw significant growth, representing 14% of total bookings, with a 350 basis point expansion over the previous year. Gross margin stood at 58.6%, a slight decline from the prior year, influenced by higher gold costs. However, the company's data-driven inventory model and strategic pricing mitigated these impacts. Looking ahead, Brilliant Earth expects a sequential improvement in sales growth, with net sales projected to be between a 3% decline and flat year-over-year for the second quarter. The company maintains a positive outlook for the remainder of 2025, anticipating 1% to 3% annual revenue growth and an adjusted EBITDA margin of 3% to 4%.

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.