Liquidity Services (LQDT) AI Stock Analysis

• Market Cap: $914.11M
• Dividend Yield: N/A
• Average Volume (3M): 342.73K
• Price to Earnings (P/E): 39.1
• Beta (1Y): 0.86
• Revenue Growth: 32.16%
• EPS Growth: 27.32%
• Country: US
• Employees: 781
• Sector: Consumer Cyclical
• Sector Strength: 63
• Industry: Specialty Retail
• EPS (TTM): 0.75
• Shares Outstanding: 31,039,309
• 10 Day Avg. Volume: 352,332
• 30 Day Avg. Volume: 342,727
• PEG Ratio: 1.43
• Price to Book (P/B): N/A
• Price to Sales (P/S): 2.37
• Price to Cash Flow (P/CF): -20.20
• P/FCF Ratio: 0.00
• 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: $41.00
• Price Target Upside: 39.22% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

Liquidity Services is performing well financially, with consistent revenue growth and solid cash flow management. The stock's technical indicators suggest a neutral outlook, while valuation metrics indicate it may be overpriced. However, strong earnings call guidance and strategic acquisitions support a positive growth trajectory, balancing the overall score.

Positive Factors

Financial performance

LSI posted solid Q1/25 results that exceeded analyst and consensus expectations and guidance.

Growth initiatives

Investments in growth initiatives over the last two fiscal years have set the stage for a strong year for LSI in FY/25.

Market presence

LSI's platforms are attracting buyers and sellers in ever-increasing numbers with a continuous flow of goods generating a positive network effect.

Negative Factors

CAG segment performance

CAG segment GMV decreased 2% to $55.4 million as increased consignment sales in the industrial and heavy equipment categories were offset by lower availability of large-spot purchase transactions with international clients.

International client transactions

Lower availability of large-spot purchase transactions with international clients has impacted the CAG segment's GMV negatively.

Liquidity Services Business Overview & Revenue Model

Company Description

Liquidity Services, Inc. provides e-commerce marketplaces, self-directed auction listing tools, and value-added services. It operates through four segments: Retail Supply Chain Group, Capital Assets Group, GovDeals, and Machinio. The company's marketplaces include liquidation.com that enable corporations to sell surplus and salvage consumer goods and retail capital assets; GovDeals marketplace, which provides self-directed service solutions in which sellers list their own assets that enables local and state government entities, and commercial businesses located in the United States and Canada to sell surplus and salvage assets; and AllSurplus, a centralized marketplace that connects global buyer base with assets from across the network of marketplaces in a single destination. It also provides marketplace for corporations located in the North America, Europe, Australia, Asia, and Africa to sell manufacturing surplus, salvage capital assets, and scrap material, as well as offers a suite of services, including surplus management, asset valuation, asset sales, marketing, returns management, asset recovery, and ecommerce services. In addition, the company operates a global search engine platform for listing used equipment for sale in the construction, machine tool, transportation, printing, and agriculture sectors. It offers products from industry verticals, such as consumer electronics, general merchandise, apparel, scientific equipment, aerospace parts and equipment, technology hardware, real estate, energy equipment, industrial capital assets, heavy equipment, fleet and transportation equipment, and specialty equipment. Liquidity Services, Inc. was incorporated in 1999 and is headquartered in Bethesda, Maryland.

How the Company Makes Money

Liquidity Services generates revenue primarily through transaction fees and service charges associated with the sale of surplus and salvage assets on its online marketplaces. The company employs a consignment model, where it earns a commission on the sales it facilitates, as well as a purchase model, where it buys assets outright and resells them for a profit. Key revenue streams include buyer fees, seller commissions, and service fees for value-added services such as asset valuation, marketing, and logistics. Significant partnerships with government agencies, retailers, and manufacturers contribute to its earnings by providing a steady supply of surplus assets for sale on its platforms.

Liquidity Services Financial Statement Overview

Summary

Liquidity Services exhibits a strong financial position with consistent revenue growth and solid margins, indicating operational efficiency. The balance sheet reflects low leverage and a healthy equity base, while cash flow management is robust, supporting future growth.

Income Statement

Liquidity Services shows strong financial performance in the TTM (Trailing-Twelve-Months) with a Gross Profit Margin of 63.84% and a Net Profit Margin of 5.77%. The company has seen substantial revenue growth, with a TTM revenue of $414.32 million, representing a 13.98% increase from the prior year. The EBIT and EBITDA margins of 6.99% and 10.28% respectively, highlight solid operational efficiency. However, the dip in EBIT from previous years indicates a slight decline in operational profitability.

Balance Sheet

The balance sheet of Liquidity Services is robust, with a low Debt-to-Equity Ratio of 0.07, indicating minimal leverage risk. The company maintains a strong Equity Ratio of 56.77%, suggesting a healthy capital structure. However, the total assets have only slightly increased, which could indicate limited asset expansion. Overall, the company is financially stable with a strong equity base.

Cash Flow

The cash flow statement is impressive, with a strong Free Cash Flow of $57.96 million in the TTM, reflecting a significant growth from previous periods. The Operating Cash Flow to Net Income Ratio of 2.80 indicates efficient cash generation relative to net income. The Free Cash Flow to Net Income Ratio of 2.43 further supports the company's strong cash position. Liquidity Services demonstrates excellent cash flow management, which is crucial for sustaining operations and funding growth.

Breakdown
TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement		Total Revenue
414.32M	363.32M	314.46M	280.05M	257.53M	205.94M
	Gross Profit
192.34M	185.17M	172.14M	160.64M	149.85M	109.92M
	EBIT
28.97M	23.40M	26.11M	-1.59M	27.17M	-3.89M
	EBITDA
41.51M	35.52M	37.36M	57.98M	34.14M	3.32M
	Net Income Common Stockholders
23.89M	19.99M	20.98M	40.32M	50.95M	-3.77M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
68.47M	155.54M	118.17M	97.94M	106.33M	76.04M
	Total Assets
146.81M	346.89M	288.97M	288.10M	255.58M	196.63M
	Total Debt
110.00K	14.24M	10.68M	14.23M	14.35M	11.32M
	Net Debt
-42.13M	-138.98M	-99.60M	-81.89M	-91.99M	-64.72M
	Total Liabilities
41.88M	164.33M	127.44M	133.57M	120.56M	84.82M
	Stockholders Equity
104.93M	182.56M	161.53M	154.54M	135.01M	111.81M
Cash Flow		Free Cash Flow
57.96M	61.31M	41.63M	36.71M	59.97M	12.23M
	Operating Cash Flow
66.95M	70.22M	47.02M	44.83M	65.42M	16.48M
	Investing Cash Flow
-24.44M	-16.11M	-11.43M	-21.08M	-1.00M	28.65M
	Financing Cash Flow
-10.75M	-11.17M	-22.07M	-31.94M	-34.66M	-5.70M

Liquidity Services Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 29.45
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LQDT, the sentiment is Negative. The current price of 29.45 is below the 20-day moving average (MA) of 30.75, below the 50-day MA of 32.80, and above the 200-day MA of 26.39, indicating a neutral trend. The MACD of -0.30 indicates Negative momentum. The RSI at 49.23 is Neutral, neither overbought nor oversold. The STOCH value of 50.05 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LQDT.

Liquidity Services Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AMZN	73 Outperform	$1.81T	30.97	24.29%	―	10.99%	91.61%
EBAY	73 Outperform	$29.08B	15.83	34.29%	1.76%	2.79%	-23.30%
LQDT	70 Outperform	$914.11M	39.09	13.48%	―	32.16%	27.32%
Sector *	59 Neutral	$11.20B	10.09	-1.41%	3.96%	1.31%	-16.95%
BZUN	54 Neutral	$164.67M	―	-4.63%	―	4.96%	55.95%
W	46 Neutral	$3.31B	―	17.86%	―	-1.27%	38.07%