Savers Value Village Inc. (SVV) AI Stock Analysis

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Savers Value Village Inc.

(NYSE:SVV)

75Outperform

Savers Value Village Inc. exhibits strong revenue growth and positive market momentum, driven by U.S. sales and strategic expansions. However, profitability challenges and a high P/E ratio present valuation concerns. The positive sentiment from the earnings call, despite some regional challenges, supports a solid overall stock score.

Positive Factors

Competitive Position

Savers' adjusted EBITDA margins are higher than peers, reinforcing the compounding benefits of growth and strong competitive position.

Market Position

Savers is the largest for-profit thrift retailer, and the resale market is poised to grow at a low-double-digit pace over the next five years.

Store Growth

Savers has a decades-long store growth opportunity with a potential to expand to over 2,000 stores in the U.S., up from the current base of just 172.

Negative Factors

Canadian Market Challenges

A weaker Canadian market drove overall comp negative in 2024 and compressed margins along with an increase in the number of new stores.

Cost Pressures

The cost of merchandise sold as a percentage of revenues increased by 300 basis points year-over-year to 43.3% in Q3-24, driven by higher material costs.

Profitability Impact

The company reduces its FY25 EPS estimate due to the detrimental impact on profitability from the new store ramp and additional FX pressure from CAD depreciation.

Savers Value Village Inc. (SVV) vs. S&P 500 (SPY)

Market Cap

$1.77B

Dividend YieldN/A

Average Volume (3M)897.52K

Price to Earnings (P/E)64.6

Beta (1Y)0.82

Revenue Growth2.49%

EPS Growth-49.97%

CountryUS

Employees22,700

SectorConsumer Cyclical

Sector Strength62

IndustrySpecialty Retail

Share Statistics

EPS (TTM)0.17

Shares Outstanding157,737,320

10 Day Avg. Volume876,378

30 Day Avg. Volume897,519

Financial Highlights & Ratios

PEG Ratio0.29

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap1.58

Enterprise Value/RevenueN/A

Enterprise Value/Gross Profit2.33

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$11.67

Price Target Upside3.83% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering7

Savers Value Village Inc. Business Overview & Revenue Model

Company DescriptionSavers Value Village Inc. (SVV) is a prominent for-profit thrift retailer operating in the secondhand goods sector. It offers a wide array of pre-owned merchandise, including clothing, accessories, household items, and furniture. The company is known for its commitment to sustainability and community development, as it promotes recycling and reuse through its retail operations. Savers Value Village operates a network of stores across the United States, Canada, and Australia, providing customers with affordable shopping options while supporting local non-profit organizations.

How the Company Makes MoneySavers Value Village Inc. generates revenue primarily through the sale of pre-owned goods in its retail stores. The company sources its inventory through donations, which are often collected in partnership with local non-profit organizations. In exchange for these donations, SVV pays the partner organizations based on the volume of goods collected, providing them with a sustainable source of funding. The company then sorts, prices, and sells these items in its stores, appealing to budget-conscious consumers and environmentally-aware shoppers. The business model is bolstered by the growing demand for sustainable and affordable shopping options, as well as the increasing popularity of thrift shopping as a lifestyle choice. Additionally, SVV may generate revenue through recycling programs, where unsold items are repurposed or sold to recyclers, further aligning with its environmental sustainability goals.

Savers Value Village Inc. Financial Statement Overview

Summary

Savers Value Village Inc. demonstrates robust revenue growth and a healthy gross profit margin, though there are challenges in profitability due to modest net profit margins and a decrease in return on equity. The high debt-to-equity ratio presents leverage risk, but stable cash flow operations provide a solid foundation for cautious growth.

Income Statement

Positive

The company exhibits strong revenue growth with a consistent upward trajectory from 2020 to the TTM period. Gross profit margin is healthy, indicating effective cost control, though there is a slight decline in EBIT and net income from the previous year. The TTM net profit margin remains modest, suggesting room for improvement in bottom-line efficiency.

Balance Sheet

Positive

The balance sheet reflects a relatively high debt-to-equity ratio, indicating a leveraged position which could pose financial risk if not managed properly. However, the equity ratio shows improvement, signaling increased shareholder investment. Return on equity has decreased, revealing that profitability relative to equity is under pressure.

Cash Flow

Positive

Cash flow generation remains stable with a positive free cash flow, though growth has slowed. The operating cash flow to net income ratio suggests efficient conversion of earnings to cash, yet the free cash flow to net income ratio indicates potential challenges in sustaining cash reserves amid capital expenditures.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
1.54B	1.50B	1.44B	1.20B	834.01M
	Gross Profit
1.21B	846.00M	837.30M	729.66M	480.56M
	EBIT
130.19M	141.86M	206.23M	182.24M	6.84M
	EBITDA
192.38M	203.00M	246.96M	207.92M	33.68M
	Net Income Common Stockholders
29.03M	53.12M	84.72M	83.39M	-63.48M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
149.97M	179.96M	112.13M	96.81M	137.20M
	Total Assets
1.89B	1.87B	1.71B	1.22B	965.62M
	Total Debt
1.30B	1.29B	1.26B	803.94M	607.83M
	Net Debt
1.15B	1.11B	1.15B	707.12M	470.63M
	Total Liabilities
1.46B	1.49B	1.48B	1.04B	791.69M
	Stockholders Equity
421.68M	376.06M	227.34M	185.43M	173.93M
Cash Flow		Free Cash Flow
28.40M	82.77M	59.26M	135.22M	10.74M
	Operating Cash Flow
134.28M	175.16M	169.43M	175.76M	29.91M
	Investing Cash Flow
-80.52M	-92.36M	-110.50M	-263.17M	-19.17M
	Financing Cash Flow
-76.63M	-17.04M	-40.22M	53.00M	36.81M

Savers Value Village Inc. Technical Analysis

Technical Analysis Sentiment

Positive

Last Price11.24

Price Trends

50DMA

7.95

Positive

100DMA

9.28

Positive

200DMA

9.56

Positive

Market Momentum

MACD

0.59

Negative

RSI

76.78

Negative

STOCH

73.77

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SVV, the sentiment is Positive. The current price of 11.24 is above the 20-day moving average (MA) of 9.05, above the 50-day MA of 7.95, and above the 200-day MA of 9.56, indicating a bullish trend. The MACD of 0.59 indicates Negative momentum. The RSI at 76.78 is Negative, neither overbought nor oversold. The STOCH value of 73.77 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SVV.

Savers Value Village Inc. Risk Analysis

Savers Value Village Inc. disclosed 43 risk factors in its most recent earnings report. Savers Value Village Inc. 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

Savers Value Village Inc. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SVV	75 Outperform	$1.77B	64.63	7.28%	―	2.49%	-49.97%
RVLV	74 Outperform	$1.39B	28.25	12.04%	―	5.73%	81.83%
LQDT	74 Outperform	$995.43M	42.57	13.48%	―	32.16%	27.32%
TDUP	65 Neutral	$523.24M	―	-79.06%	―	-6.95%	-0.73%
Sector *	61 Neutral	$6.66B	11.71	2.96%	4.01%	2.64%	-20.91%
WINA	59 Neutral	$1.27B	32.17	-118.80%	0.99%	0.33%	1.50%
RERE	51 Neutral	$551.77M	―	-0.22%	―	24.19%	95.39%

* Consumer Cyclical Sector Average

Performance Comparison

SVV

Savers Value Village Inc.

11.24

-5.65

-33.45%

LQDT

Liquidity Services

32.07

14.13

78.76%

WINA

Winmark

360.23

11.05

3.16%

RVLV

Revolve Group

19.53

-1.20

-5.79%

TDUP

thredUP

4.42

2.56

137.63%

RERE

ATRenew Inc. Sponsored ADR

2.51

0.17

7.26%

Savers Value Village Inc. Earnings Call Summary

Earnings Call Date:May 01, 2025

(Q1-2025)

% Change Since: 18.19%|

Next Earnings Date:Aug 07, 2025

Earnings Call Sentiment Positive

The earnings call reflects a generally positive sentiment with strong U.S. sales growth, positive trends in Canada, and expansion of the loyalty program and new stores. However, challenges remain, particularly in Canada due to macroeconomic pressures and the impact of currency fluctuations. Despite these challenges, the company's focus on innovation and expansion positions it well for future growth.

Q1-2025 Updates

Positive Updates

U.S. Sales Growth

Nearly double-digit sales growth in the U.S., driven by increases in both transactions and average basket size.

Positive Comp in Canada

First positive comparable store sales growth in Canada since Q4 2023, despite challenging macroeconomic conditions.

Loyalty Program Expansion

Loyalty program reached nearly 6 million total active members by the end of the first quarter.

New Store Openings

Opened 2 new stores in the quarter with plans to open 25 to 30 new stores this year.

Adjusted EBITDA Performance

Generated nearly $43 million of adjusted EBITDA in the quarter, approximately 11.6% of sales.

Central Processing Centers Expansion

Opened sixth CPC in Southern California, ahead of schedule, to support market growth.

Strong Cash Position

Ended the quarter with $73 million in cash and cash equivalents, with a net leverage ratio of 2.4x.

Negative Updates

Canadian Sales Decline

Net sales in Canada declined by 4.1% due to a weaker Canadian dollar, although constant currency sales increased by 2.2%.

Increased Expenses

Cost of merchandise sold as a percentage of net sales increased by 80 basis points, and SG&A expenses increased by 160 basis points.

Net Loss

Reported a GAAP net loss of $4.7 million, or $0.03 per diluted share, including a $2.7 million pretax loss on debt extinguishment.

Macroeconomic Challenges in Canada

Continued macroeconomic challenges in Canada, with tariffs adding uncertainty to consumer spending.

Company Guidance

During the call, management from Savers Value Village outlined several key metrics and strategic initiatives for the first quarter ending March 29, 2025. The U.S. business demonstrated nearly double-digit sales growth, with U.S. net sales increasing by 9.4% to $211 million and comparable store sales up by 4.2%. Conversely, Canadian net sales decreased by 4.1% due to a weaker Canadian dollar; however, on a constant currency basis, Canadian net sales rose 2.2% to $137 million, with a 0.6% increase in comparable store sales. The company highlighted the success of their loyalty program, which reached nearly 6 million active members. Additionally, adjusted EBITDA for the quarter was approximately $43 million, or 11.6% of sales. Looking ahead, the company plans to open 25 to 30 new stores in 2025 and is focusing on expanding its U.S. store portfolio. The fiscal year 2025 guidance includes projected net sales of $1.61 billion to $1.65 billion, with comparable store sales growth anticipated to be between 0.5% and 2.5%. Adjusted EBITDA is expected to range from $245 million to $265 million, and capital expenditures are forecasted at $125 million to $150 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.