Betterware de Mexico (BWMX) AI Stock Analysis

Compare

134 Followers

BWMX Dividends

Top Page

Betterware de Mexico

(NYSE:BWMX)

71Outperform

Betterware de Mexico's stock is supported by strong financial performance and favorable valuation metrics. Despite technical indicators showing some weakness and external challenges affecting margins, the company's strategic initiatives and strong dividend policy provide a positive outlook. Investors should be aware of the high leverage and declining free cash flow when considering investment.

Betterware de Mexico (BWMX) vs. S&P 500 (SPY)

Market Cap

$395.56M

Dividend Yield13.46%

Average Volume (3M)24.78K

Price to Earnings (P/E)10.2

Beta (1Y)1.26

Revenue Growth10.45%

EPS Growth9.32%

CountryUS

Employees2,513

SectorConsumer Cyclical

Sector Strength58

IndustrySpecialty Retail

Share Statistics

EPS (TTM)1.07

Shares Outstanding37,316,547

10 Day Avg. Volume33,334

30 Day Avg. Volume24,784

Financial Highlights & Ratios

PEG Ratio0.88

Price to Book (P/B)N/A

Price to Sales (P/S)0.66

Price to Cash Flow (P/CF)N/A

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

Betterware de Mexico Business Overview & Revenue Model

Company DescriptionBetterware de México, S.A.P.I. de C.V. operates as a direct-to-consumer company in Mexico. It focuses on the home organization segment with a product portfolio, including home solutions, kitchen and food preservation, technology and mobility, bedroom, bathroom, laundry and cleaning, and other categories. The company sells its products through twelve catalogues. Betterware de México, S.A.P.I. de C.V. was incorporated in 1995 and is based in Zapopan, Mexico. Betterware de México, S.A.P.I. de C.V. is a subsidiary of Campalier, S.A. de C.V.

How the Company Makes MoneyBetterware de Mexico makes money through a direct sales model, leveraging an extensive network of independent distributors and associates to sell its products directly to consumers. The company generates revenue primarily from the sale of its diverse range of household products, which include storage solutions, cleaning products, and kitchenware. This direct selling approach allows Betterware to maintain relatively low overhead costs and pass savings onto its customers while incentivizing its network with commissions and bonuses. Additionally, Betterware's business model is augmented by its ability to rapidly adapt to consumer trends and demands, ensuring a steady stream of new and innovative products. The company's earnings are further supported by its efficient supply chain and logistics operations, enabling effective distribution across its target markets.

Betterware de Mexico Financial Statement Overview

Summary

Betterware de Mexico has demonstrated strong revenue growth and robust profit margins. However, challenges exist with high financial leverage and declining free cash flow growth, which could impact long-term financial stability.

Income Statement

Positive

The company has demonstrated a solid gross profit margin and consistent revenue growth over the years. The TTM (Trailing-Twelve-Months) gross profit margin stands at a robust 71.77%, and the revenue has grown by 5.5% compared to the previous annual period. However, there has been a decline in EBIT and EBITDA margins over time, indicating potential cost management issues.

Balance Sheet

Neutral

The balance sheet reveals a high debt-to-equity ratio, with total debt significantly surpassing stockholders' equity, indicating higher financial leverage and potential risk. The equity ratio is relatively low at 10.9%, suggesting limited buffer against liabilities. However, the return on equity is strong at 74.77%, reflecting efficient use of equity to generate profits.

Cash Flow

Positive

The company shows a positive operating cash flow to net income ratio of 2.28, indicating healthy cash generation relative to its earnings. However, the free cash flow growth rate has decreased by 21.09% in the TTM period, raising concerns about sustaining capital expenditures and financing activities.

TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Breakdown
Income Statement		Total Revenue
13.72B	13.01B	11.50B	10.04B	7.26B	3.08B
	Gross Profit
9.85B	9.31B	7.84B	5.64B	3.97B	1.80B
	EBIT
2.00B	2.35B	1.85B	2.72B	2.12B	812.25M
	EBITDA
2.52B	2.63B	2.22B	2.72B	2.17B	857.67M
	Net Income Common Stockholders
885.40M	1.05B	872.56M	1.75B	298.44M	472.14M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
230.85M	549.73M	686.15M	1.18B	649.82M	213.70M
	Total Assets
0.00	11.09B	11.38B	5.39B	4.41B	1.79B
	Total Debt
0.00	5.50B	6.44B	1.53B	654.25M	702.30M
	Net Debt
230.85M	4.95B	5.75B	353.07M	4.43M	488.60M
	Total Liabilities
0.00	9.62B	10.31B	4.06B	3.49B	1.52B
	Stockholders Equity
178.78M	1.47B	1.07B	1.31B	921.89M	274.48M
Cash Flow		Free Cash Flow
1.76B	2.24B	1.10B	1.10B	1.12B	422.82M
	Operating Cash Flow
2.02B	2.37B	1.27B	1.52B	1.83B	605.45M
	Investing Cash Flow
-103.85M	-65.33M	-4.81B	-376.03M	-656.14M	-175.60M
	Financing Cash Flow
-2.09B	-2.57B	3.06B	-620.40M	-740.58M	-393.54M

Betterware de Mexico Technical Analysis

Technical Analysis Sentiment

Negative

Last Price11.02

Price Trends

50DMA

11.14

Negative

100DMA

11.10

Negative

200DMA

11.92

Negative

Market Momentum

MACD

-0.25

Positive

RSI

41.11

Neutral

STOCH

38.46

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BWMX, the sentiment is Negative. The current price of 11.02 is above the 20-day moving average (MA) of 10.88, below the 50-day MA of 11.14, and below the 200-day MA of 11.92, indicating a bearish trend. The MACD of -0.25 indicates Positive momentum. The RSI at 41.11 is Neutral, neither overbought nor oversold. The STOCH value of 38.46 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BWMX.

Betterware de Mexico Risk Analysis

Betterware de Mexico disclosed 45 risk factors in its most recent earnings report. Betterware de Mexico reported the most risks in the “Legal & Regulatory” category.

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

Latest Risks Added 0 New Risks

Betterware de Mexico Peers Comparison

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BWMX	71 Outperform	$395.56M	10.19	55.70%	13.46%	10.45%	9.32%
HZO	60 Neutral	$442.57M	8.18	5.75%	―	-1.73%	-40.39%
Sector *	60 Neutral	$6.55B	11.40	3.24%	4.25%	2.38%	-21.28%
YSG	53 Neutral	$439.44M	―	-19.66%	―	-2.11%	-6.49%
ODP	52 Neutral	$369.15M	25.73	9.43%	―	-10.71%	-86.13%
BNED	50 Neutral	$325.90M	―	-36.88%	―	1.38%	63.65%
FLWS	46 Neutral	$342.17M	―	-1.52%	―	-7.84%	88.34%

* Consumer Cyclical Sector Average

Performance Comparison

BWMX

Betterware de Mexico

10.29

-7.65

-42.64%

FLWS

1-800 Flowers

5.22

-4.04

-43.63%

HZO

Marinemax

19.32

-7.86

-28.92%

ODP

12.43

-38.82

-75.75%

BNED

Barnes & Noble Education

10.17

9.96

4742.86%

YSG

Yatsen Holding

4.59

0.35

8.25%

Betterware de Mexico Earnings Call Summary

Earnings Call Date: Feb 27, 2025 | % Change Since: -2.99% | Next Earnings Date: Apr 24, 2025

Earnings Call Sentiment Positive

The earnings call reflected a generally positive outlook, with significant revenue growth driven by Jafra Mexico and Betterware Mexico's resilience. However, challenges in Jafra U.S. and supply chain issues in Mexico presented notable hurdles. Despite these challenges, the company's strategic initiatives and milestones provide a confident outlook for sustainable growth.

Highlights

Double-Digit Revenue Growth

BeFra delivered double-digit revenue growth of 11.1% in Q4 2024 compared to the same period last year, driven by Jafra Mexico's remarkable 22.2% growth.

Jafra Mexico's Performance

Jafra Mexico achieved a 13% increase in revenue for the full year 2024, with its EBITDA increasing by 15.4% and margins expanding to 20.7%.

Betterware Mexico's Resilience

Betterware Mexico demonstrated resilience with a 1.5% revenue growth in Q4 and a 4.6% increase for the full year 2024.

Notable Milestones

In 2025, Betterware Mexico will celebrate its 30th anniversary, and BeFra will mark the fifth year since its U.S. IPO, with significant growth achievements.

Gross Margin Improvement

Consolidated gross margin improved by 116 basis points to 67.3% in Q4 and expanded by 70 basis points to 67.9% for the full year 2024.

Dividend and Financial Position

A dividend of MXN250 million was proposed for Q4 2024, marking the 20th consecutive dividend since the 2020 IPO, with a commitment to long-term shareholder value.

Lowlights

Challenges in Jafra U.S.

Jafra U.S. experienced a 17.6% revenue decline in Q4 due to difficulties with the Shopify Plus implementation and a 2.7% decrease for the full year.

Supply Chain and Cost Challenges

Unexpected challenges in Mexico's international supply chain led to a shortfall in EBITDA, with headwinds from Mexican peso depreciation and increased import duties.

Free Cash Flow Decline

Free cash flow declined by 21.6% for the year, mainly due to extraordinary cash inflow in 2023, but still within the normal historical range.

Jafra Mexico Margin Contraction

Jafra Mexico's gross margin contracted by 460 basis points in Q4 due to prior year synergies and cost reductions not affecting 2024.

Company Guidance

During BeFra's Fourth Quarter 2024 Earnings Conference Call, the company reported several significant metrics. BeFra achieved double-digit revenue growth of 11.1% in Q4 2024, with Jafra Mexico leading the charge with a remarkable 22.2% growth. Betterware Mexico also contributed to the success with a 1.5% increase in the quarter, marking its fifth consecutive quarter of growth. For the full year 2024, Jafra and Betterware Mexico reported revenue increases of 13% and 4.6%, respectively, contributing to an overall 8.4% rise in consolidated revenue. Despite challenges in Mexico's supply chain, BeFra's EBITDA increased by 2% to MXN2.8 billion, although slightly below the guidance range. Looking forward to 2025, BeFra expects mid to high single-digit growth in both net revenues and EBITDA, ranging from 6% to 9%, supported by strategic initiatives and a solid financial position, with a net debt to EBITDA ratio of 1.76. The company's focus includes celebrating milestones, expanding its market share, and pursuing new growth opportunities across international and domestic markets.

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.