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Liquidity Services (LQDT)
:LQDT

Liquidity Services (LQDT) AI Stock Analysis

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Liquidity Services

(NASDAQ:LQDT)

74Outperform
Liquidity Services displays strong financial performance with solid revenue growth and effective cash flow management. The company's strategic acquisitions and positive earnings call guidance enhance its growth outlook. While technical indicators suggest a neutral short-term trend, the high P/E ratio raises valuation concerns. Despite challenging market conditions and tariff uncertainties, the company's robust financial position supports a favorable outlook.
Positive Factors
Earnings
LSI posted solid Q1/25 results that exceeded analyst expectations and guidance, showcasing strong financial performance.
Market Expansion
LSI's platforms are attracting buyers and sellers in ever-increasing numbers, generating a positive network effect in the market.
Negative Factors
Segment Performance
CAG segment GMV decreased 2% as increased consignment sales were offset by lower availability of large-spot purchase transactions with international clients.

Liquidity Services (LQDT) vs. S&P 500 (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
Sep 2024Sep 2023Sep 2022Sep 2021Sep 2020
Income StatementTotal Revenue
363.32M314.46M280.05M257.53M205.94M
Gross Profit
185.17M172.14M160.64M149.85M109.92M
EBIT
23.40M26.11M-1.59M27.17M-3.89M
EBITDA
35.52M37.36M57.98M34.14M3.32M
Net Income Common Stockholders
19.99M20.98M40.32M50.95M-3.77M
Balance SheetCash, Cash Equivalents and Short-Term Investments
155.54M118.17M97.94M106.33M76.04M
Total Assets
346.89M288.97M288.10M255.58M196.63M
Total Debt
14.24M10.68M14.23M14.35M11.32M
Net Debt
-138.98M-99.60M-81.89M-91.99M-64.72M
Total Liabilities
164.33M127.44M133.57M120.56M84.82M
Stockholders Equity
182.56M161.53M154.54M135.01M111.81M
Cash FlowFree Cash Flow
61.31M41.63M36.71M59.97M12.23M
Operating Cash Flow
70.22M47.02M44.83M65.42M16.48M
Investing Cash Flow
-16.11M-11.43M-21.08M-1.00M28.65M
Financing Cash Flow
-11.17M-22.07M-31.94M-34.66M-5.70M

Liquidity Services Technical Analysis

Technical Analysis Sentiment
Positive
Last Price31.84
Price Trends
50DMA
31.30
Positive
100DMA
32.09
Negative
200DMA
27.31
Positive
Market Momentum
MACD
0.15
Negative
RSI
55.23
Neutral
STOCH
75.02
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 31.84 is above the 20-day moving average (MA) of 30.60, above the 50-day MA of 31.30, and above the 200-day MA of 27.31, indicating a bullish trend. The MACD of 0.15 indicates Negative momentum. The RSI at 55.23 is Neutral, neither overbought nor oversold. The STOCH value of 75.02 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
74
Outperform
$1.42B28.7512.04%5.73%81.83%
74
Outperform
$988.29M42.2613.48%32.16%27.32%
65
Neutral
$531.53M-79.06%-6.95%-0.73%
61
Neutral
$6.55B11.723.07%4.01%2.66%-21.27%
60
Neutral
$461.59M31.185.54%2.98%-7.23%-45.76%
51
Neutral
$542.98M-0.22%24.19%95.39%
50
Neutral
$354.50M-36.88%1.38%63.65%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
LQDT
Liquidity Services
31.84
14.09
79.38%
BNED
Barnes & Noble Education
10.41
10.19
4631.82%
RVLV
Revolve Group
19.46
-0.15
-0.76%
ARKO
ARKO Corp
4.03
-0.12
-2.89%
TDUP
thredUP
4.25
2.57
152.98%
RERE
ATRenew Inc. Sponsored ADR
2.45
0.30
13.95%

Liquidity Services Earnings Call Summary

Earnings Call Date:Feb 06, 2025
(Q1-2025)
|
% Change Since: -0.03%|
Next Earnings Date:May 08, 2025
Earnings Call Sentiment Positive
Liquidity Services delivered a strong first quarter for fiscal year 2025, with record GMV and revenue growth across all segments. The acquisition of Auction Software and Simple Auction Site is expected to further enhance their market capabilities. Despite facing certain market challenges, the company maintains a solid financial position and is poised for continued growth.
Q1-2025 Updates
Positive Updates
Record Quarterly GMV
Liquidity Services reported a record quarterly GMV of $386.1 million, up 26% from the previous year, driven by double-digit growth across all segments.
Strong Revenue Growth
Revenue increased by 72% year-over-year to $122.3 million, with a notable contribution from lower-touch purchase programs in the retail segment.
GovDeals and CAG Segments Growth
GovDeals' GMV grew by 11%, revenue by 29%, and direct profit by 25%, while the CAG segment saw a 31% increase in GMV and a 27% increase in direct profit, driven by strong performance in energy and heavy equipment verticals.
Machinio Segment Expansion
Machinio achieved double-digit organic growth and now has over 4,000 subscribers across 100 countries, with significant growth potential in the Asia Pacific region.
Acquisition of Auction Software and Simple Auction Site
Liquidity Services acquired Auction Software and Simple Auction Site to enhance market reach and software development capabilities, expected to support growth in various categories including retail and Machinio.
Strong Financial Position
Liquidity Services ended the quarter with $139.1 million in cash and no debt, providing a strong financial foundation for future growth.
Negative Updates
Challenging Market Conditions
Despite growth, the company noted persistent inflation and choppy market conditions affecting different categories.
Potential Impact of New Tariffs
The company mentioned potential challenges from new tariff situations, though historically used equipment scarcity has been neutral to positive for their business.
Company Guidance
During Liquidity Services, Inc.'s Q1 Fiscal Year 2025 conference call, management provided robust guidance emphasizing continued growth and expansion. The company achieved a record quarterly GMV of $386.1 million, marking a 26% increase from the previous year, while revenue rose 72% to $122.3 million. Each business segment reported double-digit GMV growth, with GovDeals and the Capital Assets Group (CAG) segments increasing by 11% and 31% respectively. The retail segment set new records with a 65% GMV increase. The company expects Q2 GMV to range between $360 million and $390 million, with GAAP net income projected between $5.5 million and $8 million. Liquidity Services anticipates continued growth fueled by strategic acquisitions, such as Auction Software and Simple Auction Site, and aims to reach a $2 billion annual GMV by enhancing their marketplace and expanding their seller and buyer base.
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.