Culp (CULP) AI Stock Analysis

• Market Cap: $48.06M
• Dividend Yield: N/A
• Average Volume (3M): 26.37K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.69
• Revenue Growth: -7.76%
• EPS Growth: 49.20%
• Country: US
• Employees: 1,000
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Apparel - Manufacturers
• EPS (TTM): -0.34
• Shares Outstanding: 12,662,784
• 10 Day Avg. Volume: 13,619
• 30 Day Avg. Volume: 26,374
• PEG Ratio: -0.07
• Price to Book (P/B): 0.83
• Price to Sales (P/S): 0.22
• P/FCF Ratio: -2.32
• Enterprise Value/Market Cap: 1.05
• Enterprise Value/Revenue: 0.25
• Enterprise Value/Gross Profit: 1.86
• Enterprise Value/Ebitda: -12.05
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 41 Neutral
• Price Target: $3.50 ▲(0.57% Upside)

Culp's overall stock score is primarily impacted by its weak financial performance and poor valuation metrics. The company's ongoing profitability issues and negative cash flow are significant concerns. Technical analysis also indicates bearish momentum, further weighing down the score. Despite some positive guidance from the earnings call, the macroeconomic environment and tariff impacts continue to pose significant challenges.

Positive Factors

Cost and Efficiency Enhancements

The company's focus on cost and efficiency enhancements is expected to yield significant savings, improving operational efficiency and profitability over the long term.

Successful Restructuring in Bedding Segment

The successful restructuring of the bedding segment has led to improved gross margins, indicating enhanced operational efficiency and a stronger competitive position in this segment.

Strategic Pricing and Tariff Management

By implementing strategic pricing and managing tariffs effectively, Culp can maintain its competitive edge and protect margins, which is crucial for long-term sustainability.

Negative Factors

Declining Revenue

The decline in revenue reflects ongoing challenges in market demand, which could hinder growth prospects and affect the company's ability to invest in future opportunities.

Challenges in Upholstery Segment

The significant drop in upholstery sales highlights vulnerabilities in this segment, potentially impacting overall profitability and market position if not addressed.

Negative Cash Flow

Negative cash flow indicates difficulties in generating sufficient cash to support operations and growth, which could limit financial flexibility and investment capacity.

Culp Business Overview & Revenue Model

Company Description

Culp, Inc. manufactures, sources, markets, and sells mattress fabrics, sewn covers, and cut and sewn kits for use in mattresses, foundations, and other bedding products in the United States, North America, the Far East, Asia, and internationally. It operates in two segments, Mattress Fabrics and Upholstery Fabrics. The Mattress Fabrics segment offers woven jacquard, knitted, and converted fabrics for use in the production of bedding products, including mattresses, box springs, foundations, and top of bed components. The Upholstery Fabrics segment provides jacquard woven fabrics, velvets, micro denier suedes, woven dobbies, knitted fabrics, piece-dyed woven products, and polyurethane fabrics for use in the production of residential and commercial upholstered furniture, such as sofas, recliners, chairs, loveseats, sectionals, and sofa-beds, as well as office seating and window treatment products; and installation services for customers in the hospitality and commercial industries. Culp, Inc. was founded in 1972 and is headquartered in High Point, North Carolina.

How the Company Makes Money

Culp generates revenue primarily through the sale of its upholstery and mattress fabrics to manufacturers and retailers in the furniture and bedding industries. The company employs a business model that includes both direct sales and partnerships with distributors. Key revenue streams include the sale of woven and knitted fabrics, as well as specialty fabrics that meet specific customer needs. Culp's strategic partnerships with key players in the furniture industry enhance its market presence and facilitate access to new customers. Additionally, the company's focus on innovation and sustainability in fabric production allows it to command premium pricing and cater to growing consumer preferences for eco-friendly products.

Culp Financial Statement Overview

Summary

Culp faces significant financial challenges, with declining revenues, negative profit margins, and cash flow difficulties. While leverage is low, the company struggles with profitability and cash generation, which could hinder its ability to invest in growth and manage operations effectively.

Income Statement

Culp's income statement shows significant challenges with declining revenues and negative profit margins. The TTM data indicates a revenue decline of 19.2% and a net profit margin of -4.5%, reflecting ongoing profitability issues. The gross profit margin is relatively low at 13.1%, and both EBIT and EBITDA margins are negative, indicating operational inefficiencies.

Balance Sheet

The balance sheet reveals a relatively low debt-to-equity ratio of 0.089, suggesting conservative leverage. However, the return on equity is negative at -10.0%, indicating that the company is not generating sufficient returns on its equity base. The equity ratio is stable, but overall financial health is impacted by poor profitability.

Cash Flow

Cash flow analysis shows negative operating cash flow and free cash flow, with a free cash flow to net income ratio of 1.14, indicating cash flow challenges. The free cash flow growth rate is negative, reflecting declining cash generation capabilities, which could impact future operations.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	204.92M	213.24M	225.33M	234.93M	294.84M	299.72M
Gross Profit	27.12M	26.67M	27.94M	10.90M	36.09M	49.83M
EBITDA	-4.18M	-12.63M	-3.85M	-21.11M	7.25M	19.42M
Net Income	-8.00M	-19.10M	-13.82M	-31.52M	-3.21M	3.22M
Balance Sheet
Total Assets	125.25M	123.37M	132.05M	152.18M	177.56M	214.08M
Cash, Cash Equivalents and Short-Term Investments	10.73M	6.95M	10.91M	22.37M	14.55M	45.71M
Total Debt	10.11M	17.64M	4.48M	6.25M	10.28M	9.56M
Total Liabilities	71.66M	65.73M	55.92M	63.10M	58.06M	85.07M
Stockholders Equity	125.25M	57.64M	76.13M	89.08M	119.50M	129.01M
Cash Flow
Free Cash Flow	-17.77M	-20.60M	-11.94M	5.70M	-23.14M	14.81M
Operating Cash Flow	-16.18M	-17.65M	-8.22M	7.80M	-17.44M	21.48M
Investing Cash Flow	2.55M	598.00K	-2.43M	-752.00K	2.50M	-10.68M
Financing Cash Flow	13.82M	12.67M	-126.00K	-436.00K	-7.42M	-43.71M

Culp Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 3.48
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CULP, the sentiment is Neutral. The current price of 3.48 is below the 20-day moving average (MA) of 3.52, below the 50-day MA of 3.75, and below the 200-day MA of 4.09, indicating a neutral trend. The MACD of -0.06 indicates Negative momentum. The RSI at 50.69 is Neutral, neither overbought nor oversold. The STOCH value of 43.53 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CULP.

Culp Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
JL	63 Neutral	$22.31M	65.28	17.80%	―	30.48%	30.06%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
JRSH	56 Neutral	$38.99M	64.77	0.99%	6.75%	12.25%	―
VNCE	46 Neutral	$37.88M	-1.99	-33.24%	―	2.58%	-502.04%
XELB	45 Neutral	$6.39M	-0.16	-78.27%	―	-46.66%	24.23%
UFI	44 Neutral	$70.69M	-2.93	-9.61%	―	-5.26%	42.84%
CULP	41 Neutral	$48.06M	-4.47	-18.32%	―	-7.76%	49.20%