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Caesarstone Sdot-Yam Ltd. (CSTE)
NASDAQ:CSTE
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CaesarStone Sdot-Yam
(NASDAQ:CSTE)
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Rating:38Underperform
Price Target:
$1.00
▲(3.09% Upside)
CaesarStone Sdot-Yam's overall stock score is primarily impacted by its poor financial performance, characterized by declining revenue and profitability issues. Technical analysis indicates bearish momentum, and valuation metrics are unattractive due to negative earnings. Despite some strategic initiatives, the company's financial and operational challenges weigh heavily on its stock score.
Positive Factors
Cost Reduction Initiatives
The company's ongoing cost reduction initiatives are expected to yield significant savings, enhancing profitability and operational efficiency over the long term.
Porcelain Business Expansion
Expanding the Porcelain product line positions CaesarStone to capture new market opportunities, potentially driving revenue growth and diversifying its product offerings.
Solid Financial Position
A strong net cash position provides financial flexibility, enabling the company to invest in growth initiatives and weather economic challenges.
Negative Factors
Revenue Decline
Significant revenue decline indicates challenges in maintaining market share and demand, impacting long-term growth prospects and financial stability.
Gross Margin Decrease
Decreasing gross margins suggest cost pressures and reduced pricing power, which could hinder profitability and competitive positioning over time.
Silicosis Lawsuits
Ongoing legal issues related to silica dust exposure pose financial risks and could damage the company's reputation, affecting long-term operational stability.
CaesarStone Sdot-Yam (CSTE) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$36.28M
Dividend YieldN/A
Average Volume (3M)61.21K
Price to Earnings (P/E)―
Beta (1Y)0.52
Revenue Growth-20.14%
EPS Growth8.70%
CountryUS
Employees1,532
SectorIndustrials
Sector Strength72
IndustryConstruction
Share Statistics
EPS (TTM)-0.33
Shares Outstanding34,555,830
10 Day Avg. Volume51,553
30 Day Avg. Volume61,207
Financial Highlights & Ratios
PEG Ratio0.05
Price to Book (P/B)0.53
Price to Sales (P/S)0.33
P/FCF Ratio6.84
Enterprise Value/Market Cap3.12
Enterprise Value/Revenue0.28
Enterprise Value/Gross Profit1.39
Enterprise Value/Ebitda-3.25
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusModerate Buy
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
CaesarStone Sdot-Yam Business Overview & Revenue Model
Company DescriptionCaesarstone Ltd., together with its subsidiaries, develops, manufactures, and markets engineered quartz and other surfaces under the Caesarstone brand in the United States, Australia, Canada, Latin America, Asia, Israel, Europe, the Middle East, and Africa. The company's engineered quartz slabs are primarily used as indoor and outdoor kitchen countertops in the renovation and remodeling construction end markets. Its products are also used in other applications, such as vanity tops, wall panels, back splashes, floor tiles, stairs, furniture, and other interior and exterior surfaces that are used in various residential and non-residential applications. The company also offers porcelain products under the Lioli brand for flooring and cladding applications, as well as resells natural stones, various ancillary fabrication tools, and installation accessories; and sells sinks and materials. It sells its products directly to fabricators, sub-distributors, and resellers; and through direct sales force and indirect network of independent distributors. The company was formerly known as Caesarstone Sdot Yam Ltd. and changed its name to Caesarstone Ltd. in June 2016. Caesarstone Ltd. was founded in 1987 and is headquartered in Menashe, Israel.
How the Company Makes MoneyCaesarStone generates revenue primarily through the sale of its engineered quartz surfaces to distributors, wholesalers, and directly to consumers. The company has established a strong distribution network, which includes partnerships with retailers and contractors, allowing it to reach a broad customer base. Key revenue streams include the sale of countertop surfaces for kitchens and bathrooms, as well as other applications in residential and commercial settings. Additionally, CaesarStone benefits from its brand recognition and reputation for quality, which enables it to command premium pricing for its products. Seasonal trends in the construction and renovation markets, as well as strategic collaborations with home improvement retailers, play significant roles in driving sales and enhancing profitability.
CaesarStone Sdot-Yam Earnings Call Summary
Earnings Call Date:Aug 06, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 12, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant operational improvements, including cost reductions and a stronger financial position. However, these positives were overshadowed by substantial revenue declines, market challenges in key regions, and increased legal liabilities. The sentiment of the call is tempered by a mix of strategic progress and ongoing financial and operational challenges.Q2-2025 Updates
Positive Updates
Cost Reduction Initiatives
Caesarstone initiated additional cost reductions expected to bring $10 million of annualized savings in the second half of 2025, adding to the $10 million already on track for 2025 compared to 2024. Total annualized cost savings since 2022 have reached over $55 million.
Operational Flexibility and Production Shifts
Over 70% of production has been shifted to Caesarstone's global manufacturing network, enhancing operational flexibility and competitiveness.
Porcelain Business Expansion
Accelerated product development and expanded Porcelain product portfolio to capture market opportunities, with a full zero crystalline silica collection launched in Australia.
Solid Financial Position
As of June 30, 2025, Caesarstone's balance sheet included total cash of $75.6 million and total debt of $3.2 million, resulting in a net cash position of $72.4 million.
EMEA Sales Stability
EMEA sales increased by 0.7% on a constant currency basis, with contributions from stronger volumes, favorable order timing, and an expanded direct presence in Germany.
Negative Updates
Revenue Decline
Global revenue in the second quarter was $101.1 million, down 15.6% year-over-year on a constant currency basis, due to lower volumes and economic headwinds.
US and Australia Sales Decline
US sales declined by 17% to $49.6 million, and Australia sales were down 18.2% on a constant currency basis due to market conditions and regulatory changes.
Gross Margin Decrease
Gross margin decreased to 19.6% from 22.9% in the prior year quarter, with adjusted gross margin at 19.7% compared to 23.8% in the prior year quarter.
Increased Operating Expenses
Operating expenses were $32.5 million or 32.1% of revenue compared to $36.6 million or 30.6% of revenue in the prior year quarter, with an increase as a percentage of revenue owing to the impact of lower revenues against a relatively fixed cost base.
Adjusted EBITDA Loss
Adjusted EBITDA in the second quarter was a loss of $6.4 million compared to a loss of $0.1 million in the prior year quarter, primarily reflecting lower revenues and gross margins.
Silicosis Lawsuits
Currently involved in lawsuits with 423 injured persons alleging injuries related to crystalline silica dust. A provision of $44.9 million has been recorded, with insurance receivable for $25.6 million.
Company Guidance
In the Caesarstone Second Quarter 2025 Earnings Conference Call, the company provided several key metrics and guidance related to its financial performance and strategic initiatives. The company reported global revenue of $101.1 million, a decrease of 15.6% on a constant currency basis year-over-year, primarily due to lower volumes. In the U.S., sales declined by 17% to $49.6 million, while Australia and Canada saw sales decreases of 18.2% and 12.5%, respectively, on a constant currency basis. Adjusted EBITDA was a loss of $6.4 million, contrasting with a loss of $0.1 million in the prior year quarter. Gross margin dropped to 19.6% from 22.9% in the previous year, mainly due to reduced production levels and an unfavorable product mix. Operating expenses were reported at $32.5 million, or 32.1% of revenue. The company is implementing cost-saving measures expected to yield $20 million in annualized savings by the second half of 2025, adding to a total of over $55 million in savings since 2022. Caesarstone is also focusing on expanding its Porcelain product line and ensuring compliance with regulatory requirements in Australia. The company remains committed to its transformation strategy to enhance profitability and operational efficiency amid ongoing market and economic challenges.CaesarStone Sdot-Yam Financial Statement Overview
Summary
CaesarStone Sdot-Yam is facing significant financial challenges, with declining revenue, negative profitability margins, and negative operating cash flow. The balance sheet shows moderate leverage, but the negative return on equity highlights profitability issues.Income Statement
CaesarStone Sdot-Yam has experienced declining revenue over recent periods, with a negative revenue growth rate of -4.31% in TTM. The company is facing significant profitability challenges, as indicated by negative net profit margins and EBIT margins. The gross profit margin has also decreased over time, reflecting pressure on cost management and pricing power.35
Negative
Balance Sheet
The company's balance sheet shows moderate leverage with a debt-to-equity ratio of 0.48 in TTM, which is relatively stable. However, the return on equity is negative, indicating that the company is not generating sufficient returns on shareholders' equity. The equity ratio remains stable, suggesting a balanced capital structure, but profitability issues are a concern.45
Neutral
Cash Flow
CaesarStone Sdot-Yam's cash flow situation is challenging, with negative operating cash flow in TTM. Despite this, the free cash flow to net income ratio is positive, indicating some efficiency in converting earnings to cash. The free cash flow growth rate is volatile, reflecting inconsistent cash generation capabilities.40
Negative
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 406.18M | 443.22M | 565.23M | 690.81M | 643.89M | 486.41M |
| Gross Profit | 81.39M | 96.67M | 94.23M | 163.25M | 171.50M | 133.94M |
| EBITDA | -34.84M | -20.61M | -51.62M | -13.30M | 61.41M | 58.30M |
| Net Income | -60.00M | -42.83M | -107.66M | -56.37M | 18.97M | 7.22M |
Balance Sheet | ||||||
| Total Assets | 529.12M | 549.04M | 579.86M | 752.98M | 867.65M | 820.92M |
| Cash, Cash Equivalents and Short-Term Investments | 75.63M | 106.34M | 91.12M | 59.16M | 85.54M | 122.36M |
| Total Debt | 118.45M | 136.86M | 146.00M | 155.59M | 164.36M | 167.62M |
| Total Liabilities | 280.27M | 275.26M | 257.01M | 324.03M | 365.49M | 325.87M |
| Stockholders Equity | 246.65M | 277.17M | 315.06M | 426.63M | 499.88M | 492.94M |
Cash Flow | ||||||
| Free Cash Flow | -23.30M | 21.45M | 55.36M | -41.11M | -10.51M | 27.79M |
| Operating Cash Flow | -11.91M | 31.87M | 66.53M | -23.31M | 20.97M | 47.62M |
| Investing Cash Flow | -25.28M | -24.36M | -40.53M | -7.29M | -36.66M | -68.31M |
| Financing Cash Flow | -2.98M | -3.04M | -23.78M | 9.16M | -23.76M | -6.08M |
CaesarStone Sdot-Yam Technical Analysis
Negative
0.97
Price Trends
1.38
Negative
1.57
Negative
2.22
Negative
Market Momentum
-0.13
Positive
23.65
Positive
9.92
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CSTE, the sentiment is Negative. The current price of 0.97 is below the 20-day moving average (MA) of 1.22, below the 50-day MA of 1.38, and below the 200-day MA of 2.22, indicating a bearish trend. The MACD of -0.13 indicates Positive momentum. The RSI at 23.65 is Positive, neither overbought nor oversold. The STOCH value of 9.92 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CSTE.
CaesarStone Sdot-Yam Risk Analysis
CaesarStone Sdot-Yam disclosed 51 risk factors in its most recent earnings report. CaesarStone Sdot-Yam 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
CaesarStone Sdot-Yam Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
66 Neutral | $1.82B | 831.62 | 13.29% | ― | -9.21% | -97.43% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
62 Neutral | $503.38M | 18.87 | 2.20% | ― | -0.19% | -50.51% | |
53 Neutral | $796.76M | ― | -2.68% | ― | 4.12% | -198.38% | |
50 Neutral | $599.15M | ― | -43.35% | 2.45% | 70.18% | -374.22% | |
38 Underperform | $36.28M | -0.60 | -21.97% | ― | -20.14% | 8.70% | |
38 Underperform | $221.26M | ― | -155.46% | ― | -15.28% | -350.51% |
* Industrials Sector Average
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CaesarStone Sdot-Yam Corporate Events
Caesarstone Ltd. Announces Annual General Meeting for November 2025
Oct 8, 2025
On October 8, 2025, Caesarstone Ltd. announced its board of directors’ decision to hold the annual general meeting of shareholders on November 19, 2025. The meeting will address the re-election and election of board members and the re-appointment of the company’s independent auditors. Shareholders will vote on these proposals, and the board recommends voting in favor. The meeting will also provide an opportunity to discuss the company’s audited financial statements for the fiscal year ended December 31, 2024.
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.