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CaesarStone Sdot-yam (CSTE)
:CSTE
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CaesarStone Sdot-Yam
(NASDAQ:CSTE)
Rating:44Neutral
Price Target:
$1.50
▼(-18.48%Downside)
Positive Factors
Cost Management
With an incremental ~$10M of cost savings to be realized and continued gross margin improvement expected, the company remains well positioned to capitalize on the eventual demand recovery.
Market Outlook
There are signs the worst is behind the Company, and should macro relief come as self-help initiatives take full hold, there could be material upside to numbers and valuation for this business.
Production Efficiency
The company’s improved production footprint not only offset pressure from unfavorable product mix and lower fixed cost absorption but resulted in an expansion of gross margin.
Negative Factors
Financial Performance
Caesarstone reported weaker than anticipated results as persistent macro headwinds continue to suppress demand while unfavorable product mix placed additional pressure on margins.
Sales Decline
The run of extraordinarily weak R&R activity is expected to continue with another significant decline in sales and comparable adjusted EBITDA.
CaesarStone Sdot-Yam (CSTE) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$63.58M
Dividend YieldN/A
Average Volume (3M)138.55K
Price to Earnings (P/E)―
Beta (1Y)0.58
Revenue Growth-20.34%
EPS Growth53.57%
CountryUS
Employees1,532
SectorIndustrials
Sector Strength92
IndustryConstruction
Share Statistics
EPS (TTM)-0.29
Shares Outstanding34,555,830
10 Day Avg. Volume233,617
30 Day Avg. Volume138,551
Financial Highlights & Ratios
PEG Ratio0.07
Price to Book (P/B)0.27
Price to Sales (P/S)0.00
P/FCF Ratio-51.74
Enterprise Value/Market Cap1.52
Enterprise Value/Revenue0.05
Enterprise Value/Gross Profit1.09
Enterprise Value/Ebitda-0.89
Forecast
1Y Price Target
$5.00Price Target Upside171.74% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering0
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 Sdot-Yam generates revenue through the manufacture and sale of quartz surfaces, which are distributed worldwide through a network of distributors, retailers, and direct sales channels. The company's key revenue streams include sales to the residential market, where quartz surfaces are used primarily in kitchens and bathrooms, and to the commercial market, which includes applications in hotels, restaurants, and office buildings. CaesarStone also benefits from strategic partnerships with home improvement retailers and interior design firms, which help to enhance its market presence and drive sales. Additionally, the company's commitment to innovation and product development ensures a steady introduction of new designs and products, contributing to sustained revenue growth.
CaesarStone Sdot-Yam Earnings Call Summary
Earnings Call Date:May 07, 2025
(Q1-2025)
| % Change Since: -25.51%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Negative
The earnings call presented several significant challenges, including a notable decline in revenue across major markets, decreased gross margins, and legal challenges. These issues were somewhat balanced by strategic operational shifts and growth in certain regions, yet the overall sentiment remains cautious due to the financial losses and ongoing market pressures.Q1-2025 Updates
Positive Updates
Operational Flexibility Achieved
Shifted more than 70% of production to global manufacturing network, allowing quick adaptation to market fluctuations and maintaining resilient gross margins.
Porcelain Segment Growth
Ongoing investments in porcelain and the completion of the Lioli Ceramica minority acquisition expected to drive innovation and capture new market opportunities.
EMEA and Israel Market Growth
EMEA region revenue increased by 16.4% and Israel sales increased by 13.2% on a constant currency basis, reflecting improved market conditions.
Strong Financial Position
Net cash position of $85.3 million, providing significant financial flexibility to navigate challenges and continue investments.
Negative Updates
Revenue Decline
Global revenue decreased to $99.6 million from $118.3 million in the prior year quarter, with a 14.5% year-over-year decrease on a constant currency basis.
U.S. Market Challenges
Sales in the U.S. were down 19.4% due to softer market conditions in the residential channel and softness in the Commercial segment.
Australia Sales Drop
Australia sales dropped by approximately 28.2% on a constant currency basis due to market uncertainty and high interest rates.
Gross Margin Decrease
Gross margin decreased to 21.3% from 24.5% in the prior year, mainly due to lower fixed cost absorption and unfavorable product mix.
Adjusted EBITDA Loss
Adjusted EBITDA was a loss of $7.1 million compared to a gain of $0.6 million in the prior year quarter.
Lawsuits and Legal Provisions
Provision of $50 million for lawsuits involving 357 claims related to respirable crystalline silica dust, with insurance receivable of $31.6 million.
Company Guidance
During the Caesarstone First Quarter 2025 Earnings Conference Call, the company provided detailed guidance on various performance metrics. Caesarstone reported a global revenue of $99.6 million, which represented a 14.5% year-over-year decrease on a constant currency basis, mainly due to lower volumes impacted by global economic headwinds. The U.S. sales fell 19.4% to $49.1 million, with Canada and Australia also seeing declines of 11.5% and 28.2% respectively, while the EMEA region showed a positive growth of 16.4%. The gross margin was 21.3%, down from 24.5% in the previous year, influenced by lower fixed cost absorption and unfavorable product mix. Operating expenses rose to $35.9 million, making up 36.1% of the revenue. The adjusted EBITDA showed a loss of $7.1 million, and the adjusted net loss per share was $0.29. Despite these challenges, the company maintained a net cash position of $85.3 million, indicating significant financial flexibility. Caesarstone withdrew its full-year outlook due to macroeconomic pressures and recently imposed U.S. tariffs but is focused on achieving $10 million in savings through cost optimization initiatives in 2025.CaesarStone Sdot-Yam Financial Statement Overview
Summary
CaesarStone Sdot-Yam is facing financial headwinds, including declining revenues, negative profitability, and cash flow challenges. The company has increased leverage, posing potential financial risks, and needs strategic improvements for financial stabilization.Income Statement
CaesarStone Sdot-Yam has experienced a significant decline in revenue over recent periods, with a negative revenue growth rate. The company currently faces negative gross and net profit margins, indicating difficulties in maintaining profitability. Despite previous periods of positive EBIT and EBITDA margins, recent TTM (Trailing-Twelve-Months) reports show negative margins, reflecting operational challenges.45
Neutral
Balance Sheet
The balance sheet reveals a substantial decline in stockholders' equity and total assets. The debt-to-equity ratio has increased, indicating rising leverage and potential financial risk. However, the equity ratio is moderate, suggesting that equity still constitutes a fair portion of the company's assets. The declining return on equity (ROE) reflects ongoing struggles in generating returns for shareholders.55
Neutral
Cash Flow
Cash flow analysis indicates a decrease in free cash flow and operating cash flow in recent periods. The free cash flow to net income ratio is negative, emphasizing cash flow challenges. The operating cash flow remains positive, but its growth rate has declined significantly, reflecting operational inefficiencies.50
Neutral
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 424.49M | 443.22M | 565.23M | 690.81M | 643.89M | 486.41M | Gross Profit |
| 88.86M | 96.67M | 91.94M | 163.25M | 171.50M | 133.94M | EBIT |
| -51.04M | -41.89M | -88.03M | 84.97M | 27.43M | 35.16M | EBITDA |
| -27.95M | -20.61M | -51.62M | -13.30M | 61.41M | 58.30M | Net Income Common Stockholders |
| -50.63M | -42.83M | -107.66M | -56.37M | 18.97M | 7.22M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 138.71M | 106.34M | 91.12M | 59.16M | 85.54M | 122.36M | Total Assets |
| 652.99M | 549.04M | 579.86M | 752.98M | 867.65M | 820.92M | Total Debt |
| 15.99M | 136.86M | 146.00M | 155.59M | 164.36M | 148.77M | Net Debt |
| -122.72M | 79.52M | 91.38M | 103.51M | 90.05M | 34.52M | Total Liabilities |
| 166.61M | 275.26M | 257.01M | 324.03M | 365.49M | 325.87M | Stockholders Equity |
| 469.89M | 277.17M | 315.06M | 426.63M | 499.88M | 492.94M |
| Cash Flow | Free Cash Flow | ||||
| -1.38M | 21.45M | 55.36M | -41.11M | -10.51M | 27.79M | Operating Cash Flow |
| 8.04M | 31.87M | 66.53M | -23.31M | 20.97M | 47.62M | Investing Cash Flow |
| -23.16M | -24.36M | -40.53M | -7.29M | -36.66M | -68.31M | Financing Cash Flow |
| -3.62M | -3.04M | -23.78M | 9.16M | -23.76M | -6.08M |
CaesarStone Sdot-Yam Technical Analysis
Negative
1.84
Price Trends
2.37
Negative
3.08
Negative
3.78
Negative
Market Momentum
-0.21
Negative
31.79
Neutral
40.46
Neutral
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 1.84 is below the 20-day moving average (MA) of 1.92, below the 50-day MA of 2.37, and below the 200-day MA of 3.78, indicating a bearish trend. The MACD of -0.21 indicates Negative momentum. The RSI at 31.79 is Neutral, neither overbought nor oversold. The STOCH value of 40.46 is Neutral, 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
Overall Rating
UnderperformOutperform
Sector (66)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $79.73M | 7.33 | 9.67% | ― | 24.75% | 5.52% | |
66 Neutral | $4.50B | 12.28 | 5.32% | 248.52% | 4.13% | -12.36% | |
62 Neutral | $104.69M | 25.39 | 2.77% | 2.16% | 11.49% | -66.66% | |
44 Neutral | $63.58M | ― | -17.84% | ― | -20.34% | 53.57% | |
35 Underperform | $94.32M | 5.34 | -13.60% | ― | -49.19% | -1214.66% | |
| $96.91M | ― | -91.79% | ― | ― | ― | ||
| $82.42M | ― | -4.77% | ― | ― | ― |
* Industrials Sector Average
Performance Comparison
CSTE
CaesarStone Sdot-Yam
1.84
-3.75
-67.08%
TWIN
Twin Disc
7.40
-6.13
-45.31%
YGMZ
MingZhu Logistics Holdings
1.28
-1.53
-54.45%
NEOV
NeoVolta
3.06
0.61
24.90%
RAYA
Erayak Power Solution Group Incorporation Class A
1.87
0.98
110.11%
SFWL
Shengfeng Development Limited Class A
0.97
-0.03
-3.00%
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.