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Liquidity Services (LQDT)
NASDAQ:LQDT
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Liquidity Services (LQDT) AI Stock Analysis

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LQDT

Liquidity Services

(NASDAQ:LQDT)

Rating:74Outperform
Price Target:
$29.00
▲(8.33% Upside)
Liquidity Services' overall stock score is driven by its strong financial performance and positive earnings call, highlighting robust growth and strategic initiatives. Technical analysis suggests short-term bullish momentum, though valuation concerns and cash flow challenges present potential risks. The recent board appointment is a positive strategic move.
Positive Factors
Financial Performance
LSI delivered record GMV and solid adjusted EBITDA growth with operating cash flow of $19 million that exceeded adjusted EBITDA.
Market Expansion
The RSCG segment increased GMV by 30% due to expansion with existing clients and new retail client programs.
Strategic Positioning
Liquidity Services, Inc. holds a leadership position in the circular economy with its extensive marketplace offering maximum value to sellers and competitive auction pricing for buyers.
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.
Stock Price Decline
The decline in the stock price by over 20% is viewed as a buying opportunity due to expected improvements in the second half of the fiscal year.

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

Liquidity Services Business Overview & Revenue Model

Company DescriptionLiquidity Services (LQDT) is a leading provider of auction and liquidation services for surplus assets, primarily serving businesses, government agencies, and institutional clients. The company operates in various sectors, including retail, industrial, and government, offering a range of services such as online auctions, inventory management, and asset recovery. Its core products include platforms for auctioning surplus goods and a suite of services aimed at maximizing asset recovery and minimizing waste.
How the Company Makes MoneyLiquidity Services generates revenue through multiple streams, primarily by facilitating online auctions where clients can sell surplus and excess inventory. The company earns fees from sellers based on the final sale price of items auctioned on its platforms. Additionally, it may charge buyers a premium for winning bids. The company also engages in asset recovery and management services, which provide clients with tailored solutions for inventory liquidation and surplus asset disposition. Partnerships with major retailers, government agencies, and manufacturers enhance its supply chain and inventory solutions, contributing significantly to its revenue. Factors such as market demand for used assets and the efficiency of its auction platforms also play a crucial role in its earnings.

Liquidity Services Earnings Call Summary

Earnings Call Date:Aug 07, 2025
(Q3-2025)
|
% Change Since: |
Next Earnings Date:Dec 16, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strong financial performance with record GMV and profitability, expansion in key segments, and strategic innovation initiatives. However, there were some challenges related to tariffs and soft vehicle pricing. Overall, the positive aspects significantly outweighed the challenges.
Q3-2025 Updates
Positive Updates
Record GMV and Strong Profitability
Liquidity Services achieved a record Gross Merchandise Volume (GMV) of $413 million, a 9% increase year-over-year. They also reported a strong adjusted EBITDA margin of 31%, with adjusted EBITDA growing 16% over the prior year.
Expanding GovDeals and Capital Assets Growth
The GovDeals segment delivered a record GMV of $252 million with expansions into new accounts in New York, Florida, Texas, and California. The Capital Assets Group (CAG) segment saw double-digit organic growth in GMV and direct profit, with heavy equipment category GMV more than doubling year-over-year.
Retail Segment Success
The Retail Supply Chain Group (RSCG) segment posted a 30% increase in GMV and a 39% increase in revenue year-over-year. This growth was driven by a higher proportion of drop-ship sales and operational efficiencies.
Strong Cash Flow and Debt-Free Balance Sheet
Liquidity Services generated over $19 million of operating cash flow during the quarter and maintained a debt-free balance sheet with $167 million in cash.
Innovation and Expansion in Software Solutions
Machinio & Software Solutions businesses increased revenue by 27% and segment direct profit by 23%, with over 5,000 paying customers in over 100 countries.
Negative Updates
Tariff and Economic Headwinds
The CAG segment faced headwinds due to tariff policies affecting biopharma, semiconductor, and machine tools verticals, resulting in tempered activity in certain industrial categories.
Soft Used Vehicle Prices
The GovDeals segment experienced slightly lower vehicle pricing compared to last year, affecting GMV growth despite a record number of assets listed and sold.
Company Guidance
During the Liquidity Services Inc. Third Quarter Fiscal Year 2025 Financial Results Conference Call, management provided several key metrics indicating the company's robust performance and strategic growth plans. The company reported a record gross merchandise volume (GMV) of $413 million, a 9% increase from the previous year, with revenue rising by 28% to $119.9 million. Adjusted EBITDA margins were at 31% of direct profit, with a total non-GAAP adjusted EBITDA of $17 million, representing a 16% increase. Liquidity Services maintained a debt-free balance sheet with $167 million in cash and generated $19.3 million in operating cash flow. The GovDeals segment achieved record GMV of $252 million, with the Capital Assets Group (CAG) posting a 12% GMV growth and a 35% increase in assets sold year-over-year. Additionally, the Retail Supply Chain Group (RSCG) saw a 30% GMV increase and a 39% revenue growth year-over-year. Looking forward, the company anticipates double-digit annual growth in adjusted EBITDA for the full fiscal year 2025, with fourth-quarter GMV expected to range between $355 million and $390 million.

Liquidity Services Financial Statement Overview

Summary
Liquidity Services demonstrates solid financial health with consistent revenue growth and low leverage. While profitability margins have faced some pressure, operational efficiency remains strong. Cash flow generation has been challenging recently, but the company maintains a robust cash conversion rate. Overall, the financial position is stable with opportunities for improvement in cost management and cash flow generation.
Income Statement
75
Positive
Liquidity Services has shown consistent revenue growth, with a TTM revenue growth rate of 5.98%. The gross profit margin has decreased from 57.36% in 2022 to 42.63% in TTM, indicating potential cost management issues. However, the net profit margin has remained stable, and the EBIT margin has improved slightly to 7.25% in TTM, suggesting operational efficiency.
Balance Sheet
80
Positive
The company maintains a strong balance sheet with a low debt-to-equity ratio of 0.068 in TTM, indicating low financial leverage. Return on equity has improved to 13.72% in TTM, reflecting efficient use of equity. The equity ratio remains healthy, suggesting a stable financial position.
Cash Flow
70
Positive
Operating cash flow has decreased, impacting the operating cash flow to net income ratio, which stands at 0.33 in TTM. Free cash flow growth is negative at -6.90%, indicating potential challenges in generating cash. However, the free cash flow to net income ratio remains strong at 0.83, showing good cash conversion.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue465.51M363.32M314.46M280.05M257.53M205.94M
Gross Profit198.44M185.17M172.14M160.64M149.85M109.92M
EBITDA44.32M35.52M37.36M57.98M34.14M3.32M
Net Income26.65M19.99M20.98M40.32M50.95M-3.77M
Balance Sheet
Total Assets372.44M346.89M288.97M288.10M255.58M196.63M
Cash, Cash Equivalents and Short-Term Investments166.96M155.54M118.17M97.94M106.33M76.04M
Total Debt14.16M14.44M10.68M14.23M14.35M11.32M
Total Liabilities163.78M164.33M127.44M133.57M120.56M84.82M
Stockholders Equity208.65M182.56M161.53M154.54M135.01M111.81M
Cash Flow
Free Cash Flow42.15M61.31M41.63M36.71M59.97M12.23M
Operating Cash Flow50.77M70.22M47.02M44.83M65.42M16.48M
Investing Cash Flow-19.35M-16.11M-11.43M-21.08M-1.00M28.65M
Financing Cash Flow-5.41M-11.17M-22.07M-31.94M-34.66M-5.70M

Liquidity Services Technical Analysis

Technical Analysis Sentiment
Positive
Last Price26.77
Price Trends
50DMA
25.01
Positive
100DMA
25.81
Positive
200DMA
28.61
Negative
Market Momentum
MACD
0.51
Negative
RSI
59.15
Neutral
STOCH
60.31
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LQDT, the sentiment is Positive. The current price of 26.77 is above the 20-day moving average (MA) of 26.00, above the 50-day MA of 25.01, and below the 200-day MA of 28.61, indicating a neutral trend. The MACD of 0.51 indicates Negative momentum. The RSI at 59.15 is Neutral, neither overbought nor oversold. The STOCH value of 60.31 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
75
Outperform
$1.63B37.8810.36%10.68%37.84%
74
Outperform
$841.21M32.4114.00%38.40%32.42%
69
Neutral
$934.28M36.495.65%27.53%
67
Neutral
$550.18M62.894.01%2.42%-13.05%-68.59%
63
Neutral
$1.44B-58.93%-10.39%14.92%
61
Neutral
$17.97B12.87-5.29%2.97%1.26%-14.45%
50
Neutral
$286.39M-36.88%1.38%63.65%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
LQDT
Liquidity Services
26.77
5.26
24.45%
BNED
Barnes & Noble Education
8.54
-2.27
-21.00%
RVLV
Revolve Group
23.84
2.38
11.09%
ARKO
ARKO Corp
4.96
-0.81
-14.04%
TDUP
thredUP
11.60
10.89
1533.80%
RERE
ATRenew Inc. Sponsored ADR
4.36
1.97
82.43%

Liquidity Services Corporate Events

Executive/Board ChangesBusiness Operations and Strategy
Liquidity Services Appoints New Board Member
Positive
Jun 20, 2025

Liquidity Services announced the appointment of Paul J. Hennessy to its Board of Directors, effective October 1, 2025. Hennessy, an experienced CEO with a background in technology and marketplace businesses, will serve on the Corporate Governance and Nominating Committee and the Audit Committee. His appointment is expected to bolster Liquidity Services’ market presence and service offerings, aligning with the company’s strategic growth and innovation goals in the circular economy.

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: Aug 22, 2025