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Liquidity Services (LQDT)
:LQDT

Liquidity Services (LQDT) AI Stock Analysis

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Liquidity Services

(NASDAQ:LQDT)

Rating:73Outperform
Price Target:
$26.00
▲(7.79%Upside)
The overall stock score of 73 reflects Liquidity Services' strong financial performance and positive earnings call, highlighting growth and strategic expansions. However, the bearish technical indicators and high P/E ratio suggest caution, balancing the positive outlook with potential market volatility.
Positive Factors
Financial Health
The company has a debt-free balance sheet with significant cash and investment flexibility for organic and inorganic growth.
Growth
Consolidated GMV increased 15% to $367 million with a revenue increase of 27% to $116.4 million on a year-over-year basis.
Market Opportunities
Liquidity Services, Inc. operates in a large and fragmented reverse supply chain market, presenting significant opportunities for market share gains.
Market Position
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
Financial Performance
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, 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 through multiple streams, primarily by charging transaction fees on the sales conducted through its online marketplaces. The company operates several platforms tailored to different sectors, including GovDeals for government surplus, Liquidation.com for wholesale surplus, and Network International for the energy sector. These platforms allow clients to list and sell their surplus assets, with Liquidity Services earning a commission on each sale. Additionally, the company may charge service fees for valuation, asset management, and logistics services provided to facilitate the sale process. Strategic partnerships with large retailers and government agencies also contribute to its revenue by securing a steady flow of surplus goods for its marketplaces.

Liquidity Services Earnings Call Summary

Earnings Call Date:May 08, 2025
(Q2-2025)
|
% Change Since: -23.50%|
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.

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
85
Very Positive
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
90
Very Positive
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
80
Positive
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.
BreakdownTTMSep 2024Sep 2023Sep 2022Sep 2021Sep 2020
Income Statement
Total Revenue439.25M363.32M314.46M280.05M257.53M205.94M
Gross Profit195.73M185.17M172.14M160.64M149.85M109.92M
EBITDA40.96M35.52M37.36M57.98M34.14M3.32M
Net Income25.24M19.99M20.98M40.32M50.95M-3.77M
Balance Sheet
Total Assets358.80M346.89M288.97M288.10M255.58M196.63M
Cash, Cash Equivalents and Short-Term Investments149.03M155.54M118.17M97.94M106.33M76.04M
Total Debt14.84M14.24M10.68M14.23M14.35M11.32M
Total Liabilities162.47M164.33M127.44M133.57M120.56M84.82M
Stockholders Equity196.32M182.56M161.53M154.54M135.01M111.81M
Cash Flow
Free Cash Flow45.27M61.31M41.63M36.71M59.97M12.23M
Operating Cash Flow53.75M70.22M47.02M44.83M65.42M16.48M
Investing Cash Flow-17.08M-16.11M-11.43M-21.08M-1.00M28.65M
Financing Cash Flow-5.61M-11.17M-22.07M-31.94M-34.66M-5.70M

Liquidity Services Technical Analysis

Technical Analysis Sentiment
Negative
Last Price24.12
Price Trends
50DMA
25.94
Negative
100DMA
28.86
Negative
200DMA
28.05
Negative
Market Momentum
MACD
-0.50
Negative
RSI
48.36
Neutral
STOCH
81.46
Negative
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 24.12 is above the 20-day moving average (MA) of 23.87, below the 50-day MA of 25.94, and below the 200-day MA of 28.05, indicating a neutral trend. The MACD of -0.50 indicates Negative momentum. The RSI at 48.36 is Neutral, neither overbought nor oversold. The STOCH value of 81.46 is Negative, 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 (56)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
75
Outperform
$1.54B30.6611.97%9.09%106.50%
73
Outperform
$756.17M30.7014.01%35.78%23.49%
70
Neutral
$771.60M48.353.45%25.34%
63
Neutral
$526.47M194.122.45%2.60%-9.67%-89.84%
62
Neutral
$895.13M-69.51%-10.55%9.27%
56
Neutral
HK$23.71B3.90-1.57%6.72%0.06%-64.88%
50
Neutral
$390.94M-36.88%1.38%63.65%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
LQDT
Liquidity Services
24.22
4.48
22.70%
BNED
Barnes & Noble Education
11.36
4.94
76.95%
RVLV
Revolve Group
21.27
5.89
38.30%
ARKO
ARKO Corp
4.64
-0.68
-12.78%
TDUP
thredUP
8.00
6.30
370.59%
RERE
ATRenew Inc. Sponsored ADR
3.48
0.91
35.41%

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.

The most recent analyst rating on (LQDT) stock is a Buy with a $27.00 price target. To see the full list of analyst forecasts on Liquidity Services stock, see the LQDT Stock Forecast page.

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: Jun 21, 2025