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Caesarstone Sdot-Yam Ltd. (CSTE)
NASDAQ:CSTE
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CaesarStone Sdot-Yam
(NASDAQ:CSTE)
Rating:39Underperform
Price Target:
$2.00
▲(22.70% Upside)
Positive Factors
Cost Savings
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.
Gross Margin Improvement
The company’s improved production footprint not only offset pressure from unfavorable product mix and lower fixed cost absorption but resulted in a ~80bps expansion of gross margin.
Valuation Upside
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.
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
$57.02M
Dividend YieldN/A
Average Volume (3M)59.32K
Price to Earnings (P/E)―
Beta (1Y)0.52
Revenue Growth-20.14%
EPS Growth8.70%
CountryUS
Employees1,532
SectorIndustrials
Sector Strength84
IndustryConstruction
Share Statistics
EPS (TTM)-0.33
Shares Outstanding34,555,830
10 Day Avg. Volume81,983
30 Day Avg. Volume59,318
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap1.98
Enterprise Value/Revenue0.28
Enterprise Value/Gross Profit1.39
Enterprise Value/Ebitda-3.23
Forecast
1Y Price Target
$2.00Price Target Upside22.70% Upside
Rating ConsensusHold
Number of Analyst Covering1
CaesarStone Sdot-Yam Business Overview & Revenue Model
Company DescriptionCaesarStone Sdot-Yam (CSTE) is a leading manufacturer of premium surfaces, specializing in engineered quartz stone products that are widely used in residential and commercial spaces. The company operates primarily in the construction and home improvement sectors, providing high-quality countertops, vanities, and other surface solutions. With a commitment to innovation and design, CaesarStone offers a diverse range of colors and textures, catering to the evolving preferences of consumers and interior designers alike.
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: -7.91%|
Next Earnings Date:Nov 05, 2025
Earnings Call Sentiment Negative
The earnings call reflected significant challenges, including a notable decline in revenue and gross margin, increased legal risks, and tariff impacts. However, proactive cost-saving measures and operational improvements were also highlighted. Despite these efforts, the negative aspects of financial performance and ongoing legal issues were prominent.Q2-2025 Updates
Positive Updates
Cost Reduction Achievements
The company initiated incremental cost reductions expected to bring an additional $10 million of annualized savings commencing in the second half of 2025, adding to $10 million already realized in 2025 compared to 2024. Total annualized cost savings since 2022 now amount to over $55 million.
Operational Improvements
Over 70% of production has been shifted to the global manufacturing network, enhancing operational flexibility. Progress in the Porcelain business and launch of zero crystalline silica products in Australia further support competitiveness.
Strong Financial Position
As of June 30, 2025, the company had a net cash position of $72.4 million with total cash of $75.6 million and total debt of $3.2 million.
EMEA Sales Stability
EMEA sales increased by 0.7% on a constant currency basis due to strong performance across direct and indirect channels and expansion in Germany.
Negative Updates
Revenue Decline
Global revenue decreased to $101.1 million from $119.4 million, a drop of 15.6% year-over-year on a constant currency basis due to lower volumes and competitive pressures.
U.S. Sales Decline
Sales in the U.S. dropped 17% to $49.6 million, affected by softer market conditions in the residential channel and challenges in the commercial segment.
Margin Pressure
Gross margin fell to 19.6% from 22.9% in the prior year, with adjusted gross margin at 19.7%, impacted by lower volumes, unfavorable product mix, and lower fixed cost absorption.
Adjusted EBITDA Loss
Adjusted EBITDA was a loss of $6.4 million compared to a loss of $0.1 million in the prior year quarter, mainly due to decreased revenues and gross margins.
Legal and Regulatory Challenges
Ongoing silicosis claims involve 423 injured persons across Israel, Australia, and the U.S., with a provision of $44.9 million recorded for probable exposure.
Tariff Impact
The company estimates a tariff impact of 15% to 25% on products sold in the U.S., which represents approximately half of total revenues.
Company Guidance
During the Caesarstone Second Quarter 2025 Earnings Conference Call, the company provided detailed guidance on their financial performance and strategic initiatives. They reported a global revenue of $101.1 million, marking a 15.6% year-over-year decline on a constant currency basis, largely due to lower volumes amid global economic headwinds. The U.S. market saw a 17% decline in sales to $49.6 million, whereas Australia experienced an 18.2% drop in constant currency terms. The company's gross margin fell to 19.6% from 22.9% the previous year, and adjusted EBITDA showed a loss of $6.4 million. Despite these challenges, Caesarstone has implemented cost reduction measures, expecting $20 million in annual savings by the second half of 2025, contributing to a total of $55 million saved since 2022. Additionally, they are expanding their Porcelain product development and have launched a zero crystalline silica collection in Australia. The company maintains a strong cash position with $75.6 million in cash and $72.4 million net cash as of June 30, 2025, and is evaluating pricing strategies to mitigate the impact of U.S. tariffs, which could affect 15% to 25% of products sold in the region.CaesarStone Sdot-Yam Financial Statement Overview
Summary
CaesarStone Sdot-Yam faces significant financial challenges, with declining revenues, negative profit margins, and increased leverage. The company's financial stability is at risk, necessitating strategic improvements.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 | 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 | -34.99M | -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 | 148.77M |
| 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
1.63
Price Trends
1.85
Negative
2.14
Negative
3.13
Negative
Market Momentum
-0.06
Positive
38.75
Neutral
20.84
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 1.63 is below the 20-day moving average (MA) of 1.77, below the 50-day MA of 1.85, and below the 200-day MA of 3.13, indicating a bearish trend. The MACD of -0.06 indicates Positive momentum. The RSI at 38.75 is Neutral, neither overbought nor oversold. The STOCH value of 20.84 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 (71)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $1.82B | 14.74 | 12.97% | ― | -7.49% | 10.79% | |
73 Outperform | $856.58M | 77.89 | -3.29% | ― | -0.11% | -213.56% | |
71 Outperform | ¥268.19B | 15.08 | 8.32% | 2.78% | 6.19% | 11.06% | |
70 Neutral | $957.62M | 35.09 | 2.18% | 1.45% | 47.66% | -75.65% | |
63 Neutral | $587.43M | 22.02 | 4.46% | ― | -2.32% | -21.44% | |
52 Neutral | $478.26M | ― | -56.74% | ― | -15.16% | -1232.39% | |
39 Underperform | $57.02M | ― | -21.97% | ― | -20.14% | 8.70% |
* Industrials Sector Average
Performance Comparison
CSTE
CaesarStone Sdot-Yam
1.63
-3.01
-64.87%
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Bluelinx Holdings
78.72
-15.74
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63.25
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-1.50%
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Quanex
22.10
-4.12
-15.71%
JELD
JELD-WEN
5.99
-7.91
-56.91%
SWIM
Latham Group
8.09
2.54
45.77%
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.