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Solo Brands, Inc. Class A (DTC)
NYSE:DTC
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Solo Brands Inc Class A
(NYSE:DTC)
Rating:37Underperform
Price Target:―
Positive Factors
Market Position
CEO Mr. Chris Metz highlighted how the brands have leading market share positions, healthy gross margins, and strong brand loyalty from customers.
Product Development
The company is actively filling its product development pipeline to release new products and expand its core business in the coming years.
Sales Performance
Sales beat consensus by ~2%, with direct-to-consumer sales broadly in line and wholesale ~1% above.
Negative Factors
Investor Confidence
The company has lost significant investor confidence and may function better either as a private company or as part of a larger entity.
Leadership Instability
The cancellation of Solo Stove's rewards program, a second CEO change in 13 months, and a lack of a Q4 pre-announcement contribute to the company's instability.
NYSE Delisting
The NYSE notified Solo Brands that it would commence proceedings to delist the company's Class A common stock due to trading at abnormally low price levels.
Solo Brands Inc Class A (DTC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.63M
Dividend YieldN/A
Average Volume (3M)N/A
Price to Earnings (P/E)―
Beta (1Y)1.23
Revenue Growth-8.13%
EPS Growth0.04%
CountryUS
Employees526
SectorConsumer Cyclical
Sector Strength60
IndustrySpecialty Retail
Share Statistics
EPS (TTM)-1.94
Shares Outstanding59,186,520
10 Day Avg. VolumeN/A
30 Day Avg. VolumeN/A
Financial Highlights & Ratios
PEG Ratio0.25
Price to Book (P/B)0.65
Price to Sales (P/S)0.04
P/FCF Ratio10.20
Enterprise Value/Market Cap124.02
Enterprise Value/Revenue0.17
Enterprise Value/Gross Profit1.33
Enterprise Value/Ebitda-0.38
Forecast
1Y Price Target
$1.00Price Target Upside3233.33% Upside
Rating ConsensusHold
Number of Analyst Covering2
Solo Brands Inc Class A Business Overview & Revenue Model
Company DescriptionSolo Brands Inc Class A (DTC) is a consumer products company primarily engaged in designing, manufacturing, and selling lifestyle and outdoor goods. The company operates in the direct-to-consumer sector, focusing on delivering high-quality, innovative products that enhance customers' outdoor experiences. Its core products include portable fire pits, camp stoves, and other outdoor lifestyle accessories, catering to outdoor enthusiasts and homeowners alike.
How the Company Makes MoneySolo Brands Inc generates revenue through the direct sale of its products via online platforms and retail partnerships. The company's primary revenue stream comes from its e-commerce website, where customers can browse and purchase items directly. Additionally, Solo Brands leverages strategic partnerships with retail stores and online marketplaces to broaden its reach and increase sales. The company emphasizes a strong brand presence and customer loyalty, supported by marketing and community engagement initiatives, which in turn drive repeat purchases and word-of-mouth referrals, contributing significantly to its earnings.
Solo Brands Inc Class A Earnings Call Summary
Earnings Call Date:Mar 12, 2025
(Q4-2024)
| % Change Since: -95.45%|
Next Earnings Date:May 08, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted a challenging year with a decline in net sales and significant net losses. Despite these challenges, the company has implemented strategic initiatives to improve profitability and efficiency. The introduction of experienced leadership and the development of value-accretive initiatives are positive steps. However, uncertainties in financial compliance and the paused financial guidance contribute to a cautious outlook.Q4-2024 Updates
Positive Updates
Improved Gross Profit Margin
The adjusted gross profit margin increased to 61.7% for the year, up 30 basis points from the prior year.
Successful Cost Optimization Initiatives
The company successfully renegotiated freight contracts and consolidated distribution centers to maintain operating leverage.
Introduction of New Strategic Initiatives
Over 30 value-accretive initiatives were developed to return Solo Brands to profitable and sustainable growth.
Strengthened Leadership Team
Liz Vanzura, an award-winning marketer, joined as Interim CMO to revamp marketing strategies.
Negative Updates
Decline in Net Sales
Total net sales for 2024 were $455 million, down 8% from the prior year, with fourth quarter sales down 13.2%.
Significant Net Loss
The company reported a GAAP net loss of $180.2 million for 2024, although it was an improvement from the previous year.
Challenges in Marketing Efficiency
The effectiveness of marketing spend is being reevaluated due to inefficiencies and the need to better align with company goals.
Uncertainty in Compliance with Financial Covenants
The company expects difficulty in remaining compliant with financial covenants due to its level of indebtedness and business uncertainty.
Pause on Financial Guidance
Financial guidance has been paused due to the challenging consumer environment and tariff uncertainties.
Company Guidance
During the Solo Brands Fourth Quarter and Fiscal Year 2024 Financial Results Conference Call, the company provided guidance indicating a focus on accelerating their strategic turnaround plan for 2025, following a challenging year where net sales declined by 8% to $454.6 million. Key metrics highlighted include an adjusted gross profit margin increase to 61.7%, adjusted EBITDA of $32.6 million or 7.2% of net sales, and an adjusted net income of $11.4 million with an EPS of $0.12. The company reported a GAAP net loss of $180.2 million, an improvement from the previous year's net loss of $195.3 million. The fourth quarter alone saw net sales of $143.5 million, down 13.2% from the prior year, with a gross profit margin of 61.1%. Strategic initiatives include a focus on optimizing the bottom line, resetting the cost structure, improving marketing efficiency, and leveraging new product launches. However, they have paused financial guidance due to anticipated challenges in the consumer environment and tariff uncertainties. The company's balance sheet at year-end showed cash and cash equivalents of $12 million, with revolver borrowings of $69 million and a term loan outstanding of $83 million.Solo Brands Inc Class A Financial Statement Overview
Summary
Income Statement
Balance Sheet
Cash Flow
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 446.48M | 454.55M | 494.78M | 517.63M | 403.72M | 133.43M |
| Gross Profit | 245.92M | 260.26M | 302.15M | 318.18M | 258.91M | 86.97M |
| EBITDA | -152.30M | -149.44M | 48.47M | 58.45M | 87.09M | -15.22M |
| Net Income | -170.12M | -113.36M | -111.35M | -7.62M | 48.65M | -24.20M |
Balance Sheet | ||||||
| Total Assets | 692.40M | 495.06M | 659.32M | 862.35M | 837.74M | 542.41M |
| Cash, Cash Equivalents and Short-Term Investments | 206.39M | 11.98M | 19.84M | 23.29M | 25.10M | 32.75M |
| Total Debt | 447.94M | 30.70M | 182.48M | 113.38M | 128.15M | 73.35M |
| Total Liabilities | 517.78M | 301.70M | 287.06M | 287.35M | 263.57M | 210.31M |
| Stockholders Equity | 174.62M | 193.36M | 241.26M | 363.43M | 360.88M | 332.10M |
Cash Flow | ||||||
| Free Cash Flow | -61.48M | -4.00M | 53.33M | 23.15M | -20.89M | 31.72M |
| Operating Cash Flow | -46.14M | 10.52M | 62.42M | 32.40M | -10.25M | 32.68M |
| Investing Cash Flow | -15.33M | -14.51M | -53.08M | -10.02M | -143.89M | -274.10M |
| Financing Cash Flow | 252.81M | -3.66M | -12.87M | -23.54M | 146.48M | 281.07M |
Solo Brands Inc Class A Risk Analysis
Solo Brands Inc Class A disclosed 65 risk factors in its most recent earnings report. Solo Brands Inc Class A 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
Solo Brands Inc Class A Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $16.53B | 14.75 | 40.22% | 2.35% | 3.33% | 15.47% | |
77 Outperform | $17.02B | 45.90 | 76.24% | ― | 7.64% | 369.79% | |
70 Neutral | $3.15B | 8.73 | 20.14% | 1.10% | -3.57% | -17.43% | |
61 Neutral | €6.27B | 13.34 | 0.40% | 4.09% | 4.45% | -35.15% | |
55 Neutral | $126.83M | ― | -15.67% | ― | -4.92% | -13.73% | |
51 Neutral | $32.58M | ― | -39.57% | 3.52% | -8.85% | -397.36% | |
37 Underperform | $2.63M | ― | -60.46% | ― | -8.13% | 0.04% |
* Consumer Cyclical Sector Average
Performance Comparison
DTC
Solo Brands Inc Class A
0.06
-2.03
-97.13%
BGFV
Big 5 Sporting Goods
1.42
-1.08
-43.20%
DKS
Dick's Sporting Goods
206.23
9.42
4.79%
SPWH
Sportsman's Warehouse
3.52
1.41
66.82%
CHWY
Chewy
41.29
16.31
65.29%
ASO
Academy Sports and Outdoors
47.25
-4.20
-8.16%
Solo Brands Inc Class A Corporate Events
Executive/Board ChangesBusiness Operations and StrategyFinancial Disclosures
Solo Brands Inc. Appoints New Independent Director
Negative
Mar 12, 2025
On March 7, 2025, Solo Brands Inc. appointed Peter Laurinaitis as a Class III independent director, expanding its board from seven to eight members. The company also announced its financial results for the fourth quarter and full year 2024, highlighting a strategic transformation plan to stabilize its business amid challenging results. Despite a decrease in net sales and a net loss, the company is focusing on a turnaround plan with over 30 initiatives to improve operations and liquidity, while facing substantial doubt about its ability to continue as a going concern.
Delistings and Listing ChangesRegulatory Filings and Compliance
Solo Brands Inc Faces NYSE Non-Compliance Notice
Negative
Feb 27, 2025
On February 25, 2025, Solo Brands, Inc. received a notice from the New York Stock Exchange (NYSE) indicating non-compliance with the minimum average closing price requirement of $1.00 per share for its Class A common stock over a consecutive 30 trading-day period. The company has six months to regain compliance, which may involve a reverse stock split, but the notice does not immediately impact the stock’s listing or trading. The company’s operations and reporting obligations remain unaffected, and the stock will continue trading under the symbol ‘DTC’ with a ‘.BC’ designation to indicate non-compliance.
Executive/Board Changes
Solo Brands Inc Appoints John Larson as Interim CEO
Neutral
Feb 18, 2025
On February 18, 2025, Solo Brands, Inc. announced the appointment of John P. Larson as Interim President and CEO, succeeding Christopher Metz who resigned to ensure a smooth transition. Larson, who has a rich background in leading enthusiast brands, will guide the company while the Board searches for a permanent CEO, with Metz remaining in a non-executive role until March 7, 2025.
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.Date of analysis: ―