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Charles & Colvard Ltd (CTHR)
OTHER OTC:CTHR
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Charles & Colvard
(OTC:CTHR)
Rating:38Underperform
Price Target:
$0.00
▼(-100.00%Downside)
Charles & Colvard (CTHR) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$720.63K
Dividend YieldN/A
Average Volume (3M)1.27K
Price to Earnings (P/E)―
Beta (1Y)-10.30
Revenue GrowthN/A
EPS GrowthN/A
CountryUS
Employees24
SectorConsumer Cyclical
Sector Strength65
IndustryLuxury Goods
Share Statistics
EPS (TTM)-4.68
Shares Outstanding3,118,273
10 Day Avg. Volume1,900
30 Day Avg. Volume1,270
Financial Highlights & Ratios
PEG Ratio>-0.01
Price to Book (P/B)0.02
Price to Sales (P/S)0.00
P/FCF Ratio-0.12
Enterprise Value/Market Cap1.28
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit0.18
Enterprise Value/Ebitda-0.01
Forecast
1Y Price Target
$0.50Price Target Upside117.39% Upside
Rating ConsensusHold
Number of Analyst Covering0
Charles & Colvard Business Overview & Revenue Model
Company DescriptionCharles & Colvard, Ltd. is a prominent player in the jewelry industry, primarily focusing on the creation and distribution of moissanite gemstones and finished jewelry. Founded in 1995 and headquartered in North Carolina, the company is renowned for pioneering the use of moissanite, a gemstone known for its brilliance and durability. Charles & Colvard operates through various sales channels, including direct-to-consumer e-commerce platforms, wholesale distribution, and retail partnerships, catering to a diverse customer base seeking high-quality and ethically sourced gemstones.
How the Company Makes MoneyCharles & Colvard generates revenue through multiple streams, primarily driven by the sale of loose moissanite gemstones and finished jewelry products. The company markets its products through its own e-commerce website, which allows it to reach consumers directly and maintain higher profit margins. Additionally, it distributes its products wholesale to retailers and jewelry manufacturers, leveraging partnerships to expand its reach and enhance brand visibility. The company also benefits from strategic collaborations with designers and influencers, which help to promote its offerings and attract new customers. By focusing on sustainability and ethical sourcing, Charles & Colvard appeals to a growing segment of consumers interested in responsible luxury goods, thereby supporting its revenue growth.
Charles & Colvard Earnings Call Summary
Earnings Call Date:Jan 30, 2025
(Q3-2024)
| % Change Since: 130.00%|
Next Earnings Date:May 01, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a mixed performance with significant challenges, such as revenue decline and margin erosion, contrasted by improvements in direct-to-consumer sales and inventory management. While there are promising developments in specific segments, the overall financial performance remains under pressure.Q3-2024 Updates
Positive Updates
Growth in Direct-to-Consumer Sales
Net sales for the online channel segment, primarily direct-to-consumer, increased to $4.1 million, representing 77% of total net sales, up 7% from the previous year.
Increase in Lab-grown Gemstone Sales
Revenues for Cadia Lab-grown diamonds increased by 16% compared to Q3 FY 2023, and Forever One moissanite gemstone revenues increased by 5%.
Inventory Management and Reduction
Inventory decreased by 24% for the quarter, with a year-over-year decrease of $8 million due to strategic inventory write-downs.
Strong Liquidity and Capital Position
The company ended the quarter with $9.2 million in total cash and a working capital of $12.7 million.
Negative Updates
Overall Revenue Decline
Total net sales decreased by 21% compared to Q3 FY 2023, primarily due to weak consumer confidence and pricing pressures in the lab-grown diamond market.
Margin Erosion
Gross margin decreased to 23% from 32% in the year-ago quarter, attributed to rising commodity prices and a disposition strategy for obsolete inventory.
Increased Operating Expenses
Operating expenses increased by 13% from the previous year, driven by marketing and general administrative costs.
Net Loss
Reported a net loss of $3.6 million or $0.12 per diluted share for Q3 2024.
Company Guidance
In the Charles & Colvard third quarter fiscal year 2024 earnings call, the company reported a revenue of $5.3 million, reflecting a 21% decrease compared to Q3 FY 2023. However, this represents a sequential improvement with a 12 basis point and 3 basis point reduction over Q1 and Q2 FY 2024, respectively. The company continued to face margin erosion due to rising gold prices and promotional pricing pressures. Despite these challenges, Charles & Colvard saw a 5% increase in revenues for its Forever One moissanite gemstone product brand and a 16% rise in Cadia Lab-grown diamond sales. Finished jewelry net sales comprised 93% of the total sales for the quarter. The company maintained a strong liquidity position with $9.2 million in cash and a working capital of $12.7 million. Operating expenses rose by 13%, reflecting investments in marketing and brand awareness initiatives. The company reported a net loss of $3.6 million, or $0.12 per diluted share, but emphasized ongoing initiatives to drive revenue and achieve sustainable growth.Charles & Colvard Financial Statement Overview
Summary
Charles & Colvard faces significant financial challenges, with declining revenues and persistent losses impacting profitability. The balance sheet shows a strong equity position, but increasing debt levels pose risks. Cash flow issues further exacerbate financial stability concerns, necessitating strategic adjustments to improve performance.Income Statement
The company experienced a significant decline in revenue, with a revenue growth rate of -26.70% from 2023 to 2024. Despite a gross profit margin of 100% in 2024, the EBIT and EBITDA margins are negative, indicating substantial operational losses. The net profit margin is also negative at -65.41%, highlighting ongoing profitability challenges.25
Negative
Balance Sheet
The company has a strong equity base, with an equity ratio of 115.73% in 2024, indicating low financial leverage. However, the debt-to-equity ratio increased to 0.17, reflecting higher debt levels. The return on equity is negative due to net losses, indicating inefficiencies in generating returns from equity.60
Neutral
Cash Flow
The free cash flow growth rate is negative, and free cash flow to net income ratio is unfavorable due to negative cash flow and net income. The operating cash flow to net income ratio is also negative, indicating cash flow challenges. The company faces difficulties in converting its earnings into cash flow.30
Negative
| Breakdown | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 21.96M | 29.95M | 43.09M | 39.24M | 29.19M |
| Gross Profit | 5.19M | 4.73M | 20.24M | 18.43M | 7.99M |
| EBITDA | -14.61M | -13.03M | 3.35M | 6.23M | -5.67M |
| Net Income | -14.36M | -19.58M | 2.37M | 12.81M | -6.16M |
Balance Sheet | |||||
| Total Assets | 40.98M | 48.88M | 69.21M | 64.92M | 48.90M |
| Cash, Cash Equivalents and Short-Term Investments | 4.14M | 10.45M | 15.67M | 21.30M | 13.99M |
| Total Debt | 4.41M | 2.93M | 3.70M | 4.17M | 1.79M |
| Total Liabilities | 15.33M | 9.11M | 9.65M | 9.23M | 7.47M |
| Stockholders Equity | 25.65M | 39.77M | 59.56M | 55.69M | 41.44M |
Cash Flow | |||||
| Free Cash Flow | -8.32M | -5.16M | -988.11K | 5.99M | -286.79K |
| Operating Cash Flow | -7.37M | -3.88M | 572.55K | 6.47M | 249.19K |
| Investing Cash Flow | -1.04M | -1.28M | -1.56M | -733.47K | -535.98K |
| Financing Cash Flow | 2.30M | -451.81K | 720.50K | 1.09M | 1.90M |
Charles & Colvard Technical Analysis
Negative
0.23
Price Trends
0.35
Negative
0.68
Negative
1.07
Negative
Market Momentum
-0.04
Positive
46.63
Neutral
3.38
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CTHR, the sentiment is Negative. The current price of 0.23 is below the 20-day moving average (MA) of 0.38, below the 50-day MA of 0.35, and below the 200-day MA of 1.07, indicating a bearish trend. The MACD of -0.04 indicates Positive momentum. The RSI at 46.63 is Neutral, neither overbought nor oversold. The STOCH value of 3.38 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CTHR.
Charles & Colvard Risk Analysis
Charles & Colvard disclosed 22 risk factors in its most recent earnings report. Charles & Colvard reported the most risks in the "Ability to Sell" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Charles & Colvard Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $3.23B | 87.83 | 2.04% | 1.63% | -3.98% | -93.50% | |
70 Outperform | $163.51M | 21.88 | 14.06% | ― | 15.71% | 15.03% | |
63 Neutral | $255.14M | 20.00 | 3.67% | 8.63% | -1.36% | -54.97% | |
63 Neutral | $16.78B | 10.88 | -7.08% | 3.04% | 1.73% | -25.15% | |
50 Neutral | $145.99M | ― | -0.45% | ― | -6.12% | -105.56% | |
40 Underperform | $16.23M | ― | 89.94% | ― | 3.11% | 11.94% | |
38 Underperform | $720.63K | ― | ― | ― | ― |
* Consumer Cyclical Sector Average
Performance Comparison
CTHR
Charles & Colvard
0.23
-1.77
-88.50%
BGI
Birks & Mayors
0.84
-1.74
-67.44%
MOV
Movado Group
16.36
-6.67
-28.96%
SIG
Signet Jewelers
80.92
-1.96
-2.36%
ELA
Envela
6.16
1.38
28.87%
BRLT
Brilliant Earth Group
1.46
-0.87
-37.34%
Charles & Colvard Corporate Events
Executive/Board ChangesPrivate Placements and FinancingBusiness Operations and Strategy
Charles & Colvard Secures $2M Convertible Note Agreement
Positive
Jun 27, 2025
On June 24, 2025, Charles & Colvard entered into a Convertible Secured Note Purchase Agreement with Ethara Capital LLC for $2.0 million, structured in two tranches. This agreement grants Ethara Capital the right to appoint directors and observers to Charles & Colvard’s board, while the company secures the note with its assets. The deal, subject to shareholder approval, allows for conversion into common stock and includes waivers of severance benefits by the company’s CEO and CFO, indicating a strategic move to strengthen its financial position and governance.
Delistings and Listing ChangesRegulatory Filings and Compliance
Charles & Colvard Faces Nasdaq Delisting by April 25
Negative
Apr 22, 2025
Charles & Colvard, Ltd. announced that its common stock will be delisted from the Nasdaq Stock Market due to non-compliance with the timely filing of financial reports. The company has decided not to appeal this decision, and trading will be suspended on April 25, 2025. Following the delisting, the company’s stock is expected to be quoted on the OTC Experts Market, although there is no assurance of an active trading market.
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.