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Liquidity Services (LQDT)
NASDAQ:LQDT

Liquidity Services (LQDT) AI Stock Analysis

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LQ

Liquidity Services

(NASDAQ:LQDT)

Rating:74Outperform
Price Target:
$28.00
▲( 11.91% Upside)
Liquidity Services is in a strong financial position with robust revenue growth and a solid balance sheet, which are key strengths. However, technical indicators suggest a bearish trend, and the valuation appears high relative to earnings. Positive earnings call insights with strong GMV and revenue growth provide a favorable outlook, although challenges like weather-related disruptions and tariff concerns need monitoring.
Positive Factors
Financial Performance
LSI posted solid Q1/25 results that exceeded analyst expectations and guidance.
Market Expansion
GovDeals segment delivered double-digit growth through seller acquisition and service expansion.
Strategic Investments
Investments in growth initiatives over the last two fiscal years have set the stage for a strong year for LSI in FY/25.
Negative Factors
Operational Challenges
LSI’s Q2/25 results were at the low end of guidance ranges due to weather-related events, product mix, and expenses related to new programs.
Segment Performance
CAG segment GMV decreased 2% to $55.4 million as increased consignment sales were offset by lower availability of large-spot purchase transactions with international clients.

Liquidity Services (LQDT) vs. SPDR S&P 500 ETF (SPY)

Liquidity Services Business Overview & Revenue Model

Company DescriptionLiquidity 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 MoneyLiquidity 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
80
Positive
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
75
Positive
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
85
Very Positive
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
TTMSep 2024Sep 2023Sep 2022Sep 2021Sep 2020
Income StatementTotal Revenue
414.32M363.32M314.46M280.05M257.53M205.94M
Gross Profit
192.34M185.17M172.14M160.64M149.85M109.92M
EBIT
28.97M23.40M26.11M-1.59M27.17M-3.89M
EBITDA
41.51M35.52M37.36M57.98M34.14M3.32M
Net Income Common Stockholders
23.89M19.99M20.98M40.32M50.95M-3.77M
Balance SheetCash, Cash Equivalents and Short-Term Investments
68.47M155.54M118.17M97.94M106.33M76.04M
Total Assets
146.81M346.89M288.97M288.10M255.58M196.63M
Total Debt
110.00K14.24M10.68M14.23M14.35M11.32M
Net Debt
-42.13M-138.98M-99.60M-81.89M-91.99M-64.72M
Total Liabilities
41.88M164.33M127.44M133.57M120.56M84.82M
Stockholders Equity
104.93M182.56M161.53M154.54M135.01M111.81M
Cash FlowFree Cash Flow
57.96M61.31M41.63M36.71M59.97M12.23M
Operating Cash Flow
66.95M70.22M47.02M44.83M65.42M16.48M
Investing Cash Flow
-24.44M-16.11M-11.43M-21.08M-1.00M28.65M
Financing Cash Flow
-10.75M-11.17M-22.07M-31.94M-34.66M-5.70M

Liquidity Services Technical Analysis

Technical Analysis Sentiment
Negative
Last Price25.02
Price Trends
50DMA
29.52
Negative
100DMA
31.62
Negative
200DMA
27.81
Negative
Market Momentum
MACD
-1.76
Positive
RSI
27.30
Positive
STOCH
44.86
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 25.02 is below the 20-day moving average (MA) of 27.72, below the 50-day MA of 29.52, and below the 200-day MA of 27.81, indicating a bearish trend. The MACD of -1.76 indicates Positive momentum. The RSI at 27.30 is Positive, neither overbought nor oversold. The STOCH value of 44.86 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LQDT.

Liquidity Services Risk Analysis

Liquidity Services disclosed 37 risk factors in its most recent earnings report. Liquidity Services 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

Liquidity Services Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
74
Outperform
$775.83M31.6214.01%35.78%23.49%
72
Outperform
$1.40B27.9111.97%9.09%106.50%
66
Neutral
$586.94M36.783.45%25.34%
65
Neutral
$534.45M197.062.45%2.54%-9.67%-89.84%
62
Neutral
$6.88B11.262.78%3.93%2.65%-22.00%
60
Neutral
$849.01M-69.51%-10.55%9.27%
50
Neutral
$359.27M-36.88%1.38%63.65%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
LQDT
Liquidity Services
23.76
4.47
23.17%
BNED
Barnes & Noble Education
10.55
9.97
1718.97%
RVLV
Revolve Group
19.35
>-0.01
-0.05%
ARKO
ARKO Corp
4.50
-0.91
-16.82%
TDUP
thredUP
7.38
5.29
253.11%
RERE
ATRenew Inc. Sponsored ADR
2.62
0.31
13.42%

Liquidity Services Earnings Call Summary

Earnings Call Date:May 08, 2025
(Q2-2025)
|
% Change Since: -20.65%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Positive
The earnings call highlighted significant growth in GMV and revenue across multiple segments, along with strategic expansions and a strong financial position. However, challenges such as weather-related delays, retail segment difficulties, and potential tariff impacts were noted. Despite these challenges, the company's growth and strategic advancements contribute to a positive outlook.
Q2-2025 Updates
Positive Updates
Strong GMV Growth
Consolidated GMV increased by 15% to $367.4 million during the second quarter, with each segment contributing to growth through expanded service offerings and market share.
Revenue and Earnings Growth
Revenue grew 27% to $116.4 million, and GAAP earnings per share increased 22% to $0.22. Non-GAAP adjusted earnings per share rose 15% to $0.31.
Successful Expansion in GovDeals
GovDeals segment experienced 12% organic growth in assets listed and attracted new high-volume clients, expanding its target addressable market to $5.4 billion.
CAG Segment Performance
CAG segment saw double-digit organic growth in GMV, with record participation in heavy equipment and industrial verticals, growing 9570% year over year.
RSCG Segment Growth
RSCG segment achieved 29% year-over-year growth in GMV, expanding relationships with sellers and offering solutions to manage return goods for large e-commerce players.
Debt-Free Balance Sheet
The company maintains a debt-free balance sheet with $149 million in cash to support organic and M&A growth strategies.
Negative Updates
Weather-Related Delays
Weather events, particularly in the Southeast, affected the listing process in the GovDeals segment, causing disruptions and delays.
Challenges in Retail Segment
Retail segment faced delays in buyer demand, and margins were impacted by higher inbound purchase rates and logistics costs.
Tariff Concerns
Emerging tariff policies could disrupt vehicle supply chains and increase used vehicle prices, with potential impacts on asset sales timing and volume.
Company Guidance
During the second quarter of fiscal year 2025, Liquidity Services, Inc. demonstrated strong performance across various metrics despite economic uncertainties. The company reported a 15% growth in consolidated gross merchandise volume (GMV) to $367.4 million and a 27% increase in revenue to $116.4 million compared to the same quarter last year. Liquidity Services achieved a 20% EBITDA margin as a percentage of direct profit or net revenue, generating over $21 million in operating cash flow. Their segments exhibited robust growth, with GovDeals experiencing a 12% organic increase in asset listings and a 9% rise in GMV, while the Capital Assets Group (CAG) saw double-digit GMV growth. Retail Supply Chain Group (RSCG) posted a 29% year-over-year GMV growth, driven by market share gains. The company anticipates GMV for the third quarter to range from $395 million to $430 million, with GAAP net income expected between $6 million and $9 million, and non-GAAP adjusted EBITDA forecasted to range from $14.5 million to $17.5 million.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.