Mothercare (MTC) AI Stock Analysis

• Market Cap: £15.03M
• Dividend Yield: N/A
• Average Volume (3M): 93.40K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.04
• Revenue Growth: -24.21%
• EPS Growth: -119.05%
• Country: UK
• Employees: 149
• Sector: Consumer Cyclical
• Sector Strength: 64
• Industry: Specialty Retail
• EPS (TTM): N/A
• Shares Outstanding: 563,836,600
• 10 Day Avg. Volume: 17,006
• 30 Day Avg. Volume: 93,396
• PEG Ratio: 4.78
• Price to Book (P/B): -26.81
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -60.33
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0

• Rating: 41 Neutral
• 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 Business Overview & Revenue Model

Company Description

Mothercare 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 Money

Mothercare 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

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

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

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
TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
48.20M	56.20M	73.10M	82.50M	85.80M	164.70M
	Gross Profit
17.60M	19.60M	20.90M	27.60M	22.50M	36.20M
	EBIT
3.00M	6.70M	6.90M	11.60M	-3.20M	-1.20M
	EBITDA
4.50M	7.50M	5.90M	15.80M	-10.50M	3.70M
	Net Income Common Stockholders
-200.00K	3.30M	-100.00K	12.10M	-21.50M	-8.50M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
6.10M	5.00M	7.10M	9.20M	6.90M	6.10M
	Total Assets
91.40M	22.40M	30.60M	36.80M	35.60M	91.40M
	Total Debt
49.20M	19.90M	20.00M	20.20M	20.40M	49.20M
	Net Debt
43.10M	14.90M	12.90M	11.00M	13.50M	43.10M
	Total Liabilities
95.40M	52.50M	32.40M	35.30M	78.60M	95.40M
	Stockholders Equity
-4.00M	-30.10M	-1.80M	1.50M	-43.00M	-4.00M
Cash Flow		Free Cash Flow
1.00M	2.50M	-800.00K	2.70M	-4.40M	100.00K
	Operating Cash Flow
2.60M	4.80M	1.50M	5.60M	-4.00M	500.00K
	Investing Cash Flow
-2.40M	-2.30M	-2.30M	-2.90M	-400.00K	5.50M
	Financing Cash Flow
-1.60M	-4.50M	-1.20M	-500.00K	5.20M	-15.80M

Mothercare Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2.67
• 50DMA: Positive
• 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 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ANG	71 Outperform	£36.25M	26.90	3.66%	―	7.15%	66.14%
WRKS	69 Neutral	£26.75M	2.31	63.23%	―	0.16%	287.23%
Sector *	62 Neutral	$6.84B	11.41	2.80%	3.87%	2.70%	-24.58%
G4M	62 Neutral	£31.47M	32.05	2.68%	―	-3.30%	―
PROC	62 Neutral	£38.13M	72.92	7.58%	―	5.35%	―
SOS	58 Neutral	£21.72M	79.55	1.53%	―	-7.70%	-45.00%
MTC	41 Neutral	£15.03M	―	-10.96%	―	-24.21%	-119.05%

Mothercare Corporate Events

Mothercare Announces Change of Auditor

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.