Betterware de Mexico (BWMX) AI Stock Analysis

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Betterware de Mexico

(NYSE:BWMX)

Rating:70Neutral

Price Target:

$10.50

▲(2.04%Upside)

Betterware de Mexico faces significant challenges in revenue growth and margin compression due to macroeconomic factors, which weigh heavily on its financial performance and earnings call sentiment. Despite these challenges, the stock benefits from a strong valuation based on its P/E ratio and dividend yield, providing some attractiveness to investors. Technical analysis indicators show mixed signals, which also contributes to a cautious outlook.

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

Market Cap

$359.36M

Dividend Yield14.03%

Average Volume (3M)64.87K

Price to Earnings (P/E)12.0

Beta (1Y)1.10

Revenue Growth-5.05%

EPS Growth-55.00%

CountryUS

Employees2,524

SectorConsumer Cyclical

Sector Strength57

IndustrySpecialty Retail

Share Statistics

EPS (TTM)0.22

Shares Outstanding37,316,547

10 Day Avg. Volume48,163

30 Day Avg. Volume64,874

Financial Highlights & Ratios

PEG Ratio-0.09

Price to Book (P/B)4.03

Price to Sales (P/S)0.00

P/FCF Ratio3.92

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 its direct sales model, which involves a large network of independent distributors and associates who sell its products directly to consumers. The company primarily generates revenue from the sale of its products, which are focused on home organization and improvement solutions. Key revenue streams include sales from kitchenware, cleaning supplies, and personal care products. The company benefits from its extensive distribution network and a strong brand presence in Mexico. Significant factors contributing to its earnings include its product innovation, market penetration strategies, and the ability to leverage its direct selling approach to reach a broad customer base efficiently.

Betterware de Mexico Earnings Call Summary

Earnings Call Date:Apr 24, 2025

(Q1-2025)

% Change Since: 0.98%|

Next Earnings Date:Jul 24, 2025

Earnings Call Sentiment Negative

The earnings call reflects significant challenges faced by Betterware de México, including revenue decline, margin compression, and macroeconomic challenges. However, the company is implementing strategic initiatives like pricing adjustments and innovation to counteract these issues. Despite short-term hurdles, they maintain a positive outlook on their long-term growth potential.

Q1-2025 Updates

Positive Updates

Strategic Pricing and Promotional Activities

Betterware Mexico is focusing on strategic pricing decisions and increased promotional activity to balance product affordability and margin protection, keeping the sales force engaged.

Innovation and Product Pipeline

Continued focus on improving innovation processes and product pipeline across both Betterware and Jafra to surprise and delight customers, with efforts to make products more accessible.

Strong Internal Fundamentals

Despite external challenges, the company believes in its strong internal fundamentals and significant market share growth potential in both Mexico and the US for Jafra.

Negative Updates

Revenue Decline

Consolidated net revenues decreased by 2.9% year over year due to challenging macroeconomic conditions, with Betterware Mexico revenue dropping 9.8%.

Gross Margin and EBITDA Decline

Consolidated gross margin declined by 303 basis points, and EBITDA decreased by 29.1% due to weaker sales volumes and compressed gross margin, particularly in Mexico.

FX and Macroeconomic Challenges

The Mexican peso depreciated around 20% year over year, affecting gross margins. Economic uncertainty, especially from the US, is impacting consumer confidence in Mexico.

Negative Free Cash Flow

The company experienced negative free cash flow for the quarter, attributed to higher inventory levels and increased tax payments, although a return to normal cash flow is expected.

EPS Decline

Consolidated EPS decreased by 48.7% due to lower sales, reduced profitability, and higher tax payments.

Halt on Betterware US Expansion

Expansion of Betterware in the US has been halted due to high tariffs on Chinese products and overall uncertainty, though Jafra US operations will continue.

Company Guidance

During the first quarter of 2025, Betterware de México, S.A.P.I. de C.V. faced several challenges, leading to a 2.9% year-over-year decline in consolidated net revenues, primarily due to a challenging macroeconomic environment and a 20% depreciation of the Mexican peso. This depreciation led to a 303 basis point contraction in the consolidated gross margin and a 29.1% decrease in consolidated EBITDA. Betterware Mexico's revenue fell by 9.8%, while Jafra's growth decreased from double to single digits due to margin compression and promotional expenditures. The company maintained an EBITDA margin of 15.3% despite these challenges. The net debt to EBITDA ratio was 2.08, slightly higher than the 1.83 reported in Q1 2024. Despite a negative free cash flow for the quarter, the company expects to return to normal cash flow levels as inventory levels decrease. Betterware de México is maintaining its full-year guidance for 2025, projecting net revenue and EBITDA growth of 6 to 9%, supported by strategic pricing, promotional activities, Salesforce engagement, and innovation efforts.

Betterware de Mexico Financial Statement Overview

Summary

Betterware de Mexico shows strong gross margins and cash generation capabilities, but faces challenges with declining net margins and increased leverage. Stabilizing revenue growth and managing debt levels are crucial for sustainable financial health.

Income Statement

Positive

Betterware de Mexico has shown a strong gross profit margin over the TTM (Trailing-Twelve-Months) period, indicating efficient cost management. However, net profit margin and EBIT margin have declined compared to previous years, suggesting increased operational costs. Revenue growth has been volatile with a notable decline in the most recent year, which could pose challenges for future profitability.

Balance Sheet

Positive

The company's debt-to-equity ratio is relatively high, indicating significant leverage and potential financial risk. While the equity ratio has decreased, suggesting a shift towards more debt financing, the return on equity has decreased, indicating lower profitability relative to shareholder investment. This balance between risk and profitability is a key concern.

Cash Flow

Positive

Betterware de Mexico has maintained a positive operating cash flow to net income ratio, which is a positive sign of cash generation efficiency. However, free cash flow has decreased, and the free cash flow growth rate has been negative recently, which may limit reinvestment opportunities and affect long-term growth potential.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	14.00B	14.10B	13.01B	11.50B	10.04B	7.26B
Gross Profit	9.68B	9.58B	9.31B	7.84B	5.64B	3.97B
EBITDA	2.03B	2.21B	2.63B	2.22B	2.72B	2.17B
Net Income	561.85M	711.73M	1.05B	872.56M	1.75B	298.44M
Balance Sheet
Total Assets	10.65B	10.45B	11.09B	11.38B	5.39B	4.41B
Cash, Cash Equivalents and Short-Term Investments	344.07M	296.56M	549.73M	686.15M	1.18B	649.82M
Total Debt	5.65B	5.17B	5.50B	6.44B	1.53B	654.25M
Total Liabilities	9.60B	9.29B	9.62B	10.31B	4.06B	3.49B
Stockholders Equity	1.05B	1.16B	1.47B	1.07B	1.31B	921.89M
Cash Flow
Free Cash Flow	1.19B	1.60B	2.24B	1.10B	1.10B	1.12B
Operating Cash Flow	1.40B	1.82B	2.37B	1.27B	1.52B	1.83B
Investing Cash Flow	-10.88M	-31.91M	-65.33M	-4.81B	-376.03M	-656.14M
Financing Cash Flow	-1.47B	-2.05B	-2.57B	3.06B	-620.40M	-740.58M

Betterware de Mexico Technical Analysis

Technical Analysis Sentiment

Positive

Last Price10.29

Price Trends

50DMA

8.75

Positive

100DMA

9.79

Negative

200DMA

10.52

Negative

Market Momentum

MACD

0.09

Negative

RSI

67.06

Neutral

STOCH

73.11

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BWMX, the sentiment is Positive. The current price of 10.29 is above the 20-day moving average (MA) of 8.48, above the 50-day MA of 8.75, and below the 200-day MA of 10.52, indicating a neutral trend. The MACD of 0.09 indicates Negative momentum. The RSI at 67.06 is Neutral, neither overbought nor oversold. The STOCH value of 73.11 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 3 New Risks

We are subject to anti-corruption, anti-bribery, anti-money laundering, and antitrust laws and regulations in Mexico. Q4, 2023

If the Mexican government imposes exchange controls and/or other similar restrictions, the Mexican economy and our operations may be negatively affected. Q4, 2023

Our business may be significantly affected by the Mexican economy's general condition, by the depreciation of the peso, inflation, and high-interest rates in Mexico. Q4, 2023

Betterware de Mexico Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HZO	71 Outperform	$575.92M	11.06	5.91%	―	-0.24%	-10.33%
BWMX	70 Neutral	$359.36M	11.98	42.07%	14.03%	-5.05%	-55.00%
Sector *	63 Neutral	$16.62B	10.98	-6.98%	2.96%	1.73%	-24.23%
ODP	61 Neutral	$564.95M	28.33	4.96%	―	-10.19%	-140.90%
YSG	57 Neutral	$933.26M	―	-16.81%	―	0.23%	26.92%
BNED	50 Neutral	$385.49M	―	-36.88%	―	1.38%	63.65%
FLWS	48 Neutral	$355.96M	―	-42.08%	―	-8.53%	-2070.29%

* Consumer Cyclical Sector Average

Performance Comparison

BWMX

Betterware de Mexico

9.47

-3.81

-28.69%

FLWS

1-800 Flowers

5.70

-4.52

-44.23%

HZO

Marinemax

27.55

-8.52

-23.62%

ODP

18.54

-20.50

-52.51%

BNED

Barnes & Noble Education

11.55

3.30

40.00%

YSG

Yatsen Holding

9.31

5.70

157.89%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Jul 09, 2025