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Mothercare PLC (GB:MTC)
LSE:MTC

Mothercare (MTC) AI Stock Analysis

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GB

Mothercare

(LSE:MTC)

Rating:41Neutral
Price Target:
Mothercare's overall stock score reflects significant financial challenges and weak technical indicators. The company's declining revenue and negative equity are major concerns, though recent profitability offers a glimmer of hope. Technical analysis confirms a bearish outlook, and the valuation metrics are not compelling. In the absence of earnings call insights or corporate events, the stock remains high-risk.

Mothercare (MTC) vs. iShares MSCI United Kingdom ETF (EWC)

Mothercare Business Overview & Revenue Model

Company DescriptionMothercare plc, through its subsidiaries, operates as a specialist franchisor of products for mothers-to-be and children under the Mothercare brand. The company provides clothing, footwear, home, and travel products, as well as toys. It operates approximately 700 Mothercare stores and 400 additional stores under the Mothercare brand, as well as websites through a network of franchise partners in 37 countries. The company was founded in 1961 and is headquartered in Hemel Hempstead, the United Kingdom.
How the Company Makes MoneyMothercare makes money primarily through the sale of its wide range of products for expectant mothers and young children. Its revenue model is based on direct retail sales through its network of physical stores, as well as online sales through its e-commerce platform. The company also generates income by licensing its brand to partners in various international markets, allowing for the distribution and sale of Mothercare branded products in regions outside its core operations. Additionally, Mothercare engages in strategic partnerships with manufacturers and suppliers to ensure competitive pricing and product exclusivity, further enhancing its revenue potential.

Mothercare Financial Statement Overview

Summary
Mothercare's financial statements indicate a precarious situation. Despite a turnaround in net income to a modest profit in 2024, revenue has significantly declined, and negative equity suggests insolvency. The improvement in cash flow is a positive sign, but overall financial volatility and high leverage present considerable risks.
Income Statement
45
Neutral
Mothercare's income statement reveals a challenging financial trajectory with declining revenue, from 199.8M in 2019 to 56.2M in 2024. Despite an improvement in net income from a loss in 2023 to a positive 3.3M in 2024, the gross and net profit margins remain weak. The EBIT margin for 2024 is approximately 11.92%, showing slight improvement but is still constrained by the retail sector's competitive pressures.
Balance Sheet
30
Negative
The balance sheet highlights significant financial distress, with negative stockholders' equity of -30.1M in 2024 indicating insolvency. The company's debt-to-equity ratio is not meaningful due to negative equity, suggesting high leverage. Return on Equity remains irrelevant due to negative equity, while equity ratio is unstable, posing financial risk.
Cash Flow
40
Negative
Cash flow analysis shows improvement with positive free cash flow of 2.5M in 2024, up from -0.8M in 2023. Operating cash flow to net income ratio is 1.45, indicating reasonable efficiency in converting income into cash. However, the company's cash flow remains volatile, with significant fluctuations in free cash flow over the years.
Breakdown
TTMMar 2024Mar 2023Mar 2022Mar 2021Mar 2020
Income StatementTotal Revenue
48.20M56.20M73.10M82.50M85.80M164.70M
Gross Profit
17.60M19.60M20.90M27.60M22.50M36.20M
EBIT
3.00M6.70M6.90M11.60M-3.20M-1.20M
EBITDA
4.50M7.50M5.90M15.80M-10.50M3.70M
Net Income Common Stockholders
-200.00K3.30M-100.00K12.10M-21.50M-8.50M
Balance SheetCash, Cash Equivalents and Short-Term Investments
6.10M5.00M7.10M9.20M6.90M6.10M
Total Assets
91.40M22.40M30.60M36.80M35.60M91.40M
Total Debt
49.20M19.90M20.00M20.20M20.40M49.20M
Net Debt
43.10M14.90M12.90M11.00M13.50M43.10M
Total Liabilities
95.40M52.50M32.40M35.30M78.60M95.40M
Stockholders Equity
-4.00M-30.10M-1.80M1.50M-43.00M-4.00M
Cash FlowFree Cash Flow
1.00M2.50M-800.00K2.70M-4.40M100.00K
Operating Cash Flow
2.60M4.80M1.50M5.60M-4.00M500.00K
Investing Cash Flow
-2.40M-2.30M-2.30M-2.90M-400.00K5.50M
Financing Cash Flow
-1.60M-4.50M-1.20M-500.00K5.20M-15.80M

Mothercare Technical Analysis

Technical Analysis Sentiment
Negative
Last Price2.67
Price Trends
50DMA
2.67
Positive
100DMA
3.04
Negative
200DMA
3.51
Negative
Market Momentum
MACD
0.01
Negative
RSI
51.56
Neutral
STOCH
45.00
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:MTC, the sentiment is Negative. The current price of 2.67 is above the 20-day moving average (MA) of 2.66, above the 50-day MA of 2.67, and below the 200-day MA of 3.51, indicating a neutral trend. The MACD of 0.01 indicates Negative momentum. The RSI at 51.56 is Neutral, neither overbought nor oversold. The STOCH value of 45.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:MTC.

Mothercare Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
GBANG
71
Outperform
£36.25M26.903.66%7.15%66.14%
69
Neutral
£26.75M2.3163.23%0.16%287.23%
62
Neutral
$6.84B11.412.80%3.87%2.70%-24.58%
GBG4M
62
Neutral
£31.47M32.052.68%-3.30%
62
Neutral
£38.13M72.927.58%5.35%
GBSOS
58
Neutral
£21.72M79.551.53%-7.70%-45.00%
GBMTC
41
Neutral
£15.03M-10.96%-24.21%-119.05%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GB:MTC
Mothercare
2.67
-1.98
-42.58%
GB:G4M
Gear4music (Holdings)
150.00
22.50
17.65%
GB:SOS
Sosandar PLC
8.75
-2.50
-22.22%
GB:ANG
Angling Direct Plc
49.50
10.50
26.92%
GB:WRKS
TheWorks.co.uk plc
42.00
17.35
70.39%
GB:PROC
ProCook Group PLC
35.00
13.10
59.82%

Mothercare Corporate Events

Executive/Board ChangesShareholder Meetings
Mothercare Announces Change of Auditor
Neutral
Apr 9, 2025

Mothercare plc has announced the appointment of RPG Crouch Chapman LLP as its new auditor, replacing Gravita Audit Limited. This change is effective immediately and will be subject to shareholder approval at the next Annual General Meeting. The transition is expected to have no adverse effects on the company’s operations or stakeholders, as confirmed by Gravita.

Spark’s Take on GB:MTC Stock

According to Spark, TipRanks’ AI Analyst, GB:MTC is a Underperform.

Mothercare’s overall stock score is low, driven by significant financial distress and weak valuation. While there are signs of potential stabilization in profitability and cash flow, the high leverage and bearish technical indicators highlight ongoing risks. The stock’s unattractive valuation further underscores the need for cautious consideration.

To see Spark’s full report on GB:MTC stock, click here.

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.