Liquidity Services (LQDT) AI Stock Analysis

• Market Cap: $770.53M
• Dividend Yield: N/A
• Average Volume (3M): 368.70K
• Price to Earnings (P/E): 30.9
• Beta (1Y): 0.74
• Revenue Growth: 35.78%
• EPS Growth: 23.49%
• Country: US
• Employees: 781
• Sector: Consumer Cyclical
• Sector Strength: 59
• Industry: Specialty Retail
• EPS (TTM): 0.31
• Shares Outstanding: 31,220,722
• 10 Day Avg. Volume: 272,527
• 30 Day Avg. Volume: 368,698
• PEG Ratio: -0.21
• Price to Book (P/B): 2.11
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -20.05
• Enterprise Value/Market Cap: 0.27
• Enterprise Value/Revenue: 0.13
• Enterprise Value/Gross Profit: 1.07
• Enterprise Value/Ebitda: 1.33
• 1Y Price Target: $40.00
• Price Target Upside: 65.36% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 74 Outperform
• Price Target: $28.00 ▲(15.75%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

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.

Market Position

The company has a debt-free balance sheet with significant cash and investment flexibility for organic and inorganic growth.

Revenue Growth

Consolidated GMV increased 15% to $367 million with a revenue increase of 27% to $116.4 million on a year-over-year basis.

Negative Factors

Earnings Guidance

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 in the industrial and heavy equipment categories were offset by lower availability of large-spot purchase transactions with international clients.

Stock Price

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 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 demonstrates solid financial health with strong revenue growth and profitability. The balance sheet is characterized by low leverage and high equity ratios, ensuring financial stability. Cash flow generation is robust, but there is a slight decline in free cash flow growth, which could be a concern moving forward. Improving operating margins and cash flow growth could further enhance its financial standing.

Income Statement

Liquidity Services has shown strong revenue growth over the years, with a notable revenue increase of 20.92% in the TTM compared to the previous year. The gross profit margin stands at 44.54%, indicating efficient cost management. The net profit margin improved to 5.75%, reflecting overall profitability. However, the EBIT margin and EBITDA margin are moderate at 6.61% and 9.32%, respectively, suggesting room for improvement in operating efficiency.

Balance Sheet

The company's balance sheet is robust with a low debt-to-equity ratio of 0.08, indicating a conservative leverage approach. The return on equity (ROE) is healthy at 12.86%, showing effective utilization of equity. The equity ratio is strong at 54.73%, signifying financial stability and a solid capital structure.

Cash Flow

Operating cash flow to net income ratio is 2.13, indicating strong cash generation relative to earnings. Free cash flow has declined slightly, but the free cash flow to net income ratio remains high at 1.79, displaying efficient cash conversion. The free cash flow growth rate has slowed, highlighting potential challenges in sustaining cash flow momentum.

Breakdown
TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement		Total Revenue
439.25M	363.32M	314.46M	280.05M	257.53M	205.94M
	Gross Profit
195.73M	185.17M	172.14M	160.64M	149.85M	109.92M
	EBIT
29.05M	23.40M	26.11M	-1.59M	27.17M	-3.89M
	EBITDA
40.96M	35.52M	37.36M	57.98M	34.14M	3.32M
	Net Income Common Stockholders
25.24M	19.99M	20.98M	40.32M	50.95M	-3.77M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
149.03M	155.54M	118.17M	97.94M	106.33M	76.04M
	Total Assets
358.80M	346.89M	288.97M	288.10M	255.58M	196.63M
	Total Debt
14.84M	14.24M	10.68M	14.23M	14.35M	11.32M
	Net Debt
-123.65M	-138.98M	-99.60M	-81.89M	-91.99M	-64.72M
	Total Liabilities
162.47M	164.33M	127.44M	133.57M	120.56M	84.82M
	Stockholders Equity
196.32M	182.56M	161.53M	154.54M	135.01M	111.81M
Cash Flow		Free Cash Flow
45.27M	61.31M	41.63M	36.71M	59.97M	12.23M
	Operating Cash Flow
53.75M	70.22M	47.02M	44.83M	65.42M	16.48M
	Investing Cash Flow
-17.08M	-16.11M	-11.43M	-21.08M	-1.00M	28.65M
	Financing Cash Flow
-5.61M	-11.17M	-22.07M	-31.94M	-34.66M	-5.70M

Liquidity Services Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 24.19
• 50DMA: Negative
• 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 LQDT, the sentiment is Negative. The current price of 24.19 is below the 20-day moving average (MA) of 24.25, below the 50-day MA of 27.81, and below the 200-day MA of 27.93, indicating a neutral trend. The MACD of -0.99 indicates Negative momentum. The RSI at 39.28 is Neutral, neither overbought nor oversold. The STOCH value of 72.70 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
RVLV	76 Outperform	$1.56B	30.12	11.97%	―	9.09%	106.50%
LQDT	74 Outperform	$770.53M	30.86	14.01%	―	35.78%	23.49%
TDUP	67 Neutral	$905.77M	―	-69.51%	―	-10.55%	9.27%
Sector *	63 Neutral	$6.98B	11.41	2.80%	4.24%	2.68%	-24.94%
RERE	61 Neutral	$600.13M	36.64	3.45%	―	25.34%	―
ARKO	60 Neutral	$529.89M	195.38	2.45%	2.59%	-9.67%	-89.84%
BNED	50 Neutral	$403.54M	―	-36.88%	―	1.38%	63.65%