Waldencast Acquisition (WALD) AI Stock Analysis

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Waldencast Acquisition

(NASDAQ:WALD)

51Neutral

Waldencast Acquisition faces significant challenges with profitability and cash flow. Despite strong gross profit margins and promising strategic partnerships, the company struggles with operational losses and a bearish market momentum. The negative P/E ratio and lack of dividend further weigh on valuation. While there is potential for growth, immediate financial and operational improvements are necessary.

Positive Factors

Innovation and Growth

Growth is expected to accelerate progressively throughout the year driven by innovation and continued expansion of the distribution footprint in the US and internationally.

Market Position

Milk Makeup is currently the #2 clean makeup brand in Sephora US, while Obagi is the #1 US physician-backed skincare brand.

Sales Performance

Waldencast reported 4Q sales up +30.8% beating the Street at +27.6%.

Negative Factors

Financial Performance

WALD missed expectations and posted 1Q25 revenue of $65.4mm vs. Street's $68.1mm and adj. EBITDA of $4.4mm vs. Street's $10.3mm.

Near-term Challenges

1H25 could be more challenging in the beauty category and for WALD given the strong performance from last year.

Supply Chain Issues

Obagi's sales were weaker than anticipated due to ongoing supply chain challenges leading to out-of-stock situations for key products.

Waldencast Acquisition (WALD) vs. S&P 500 (SPY)

Market Cap

$258.94M

Dividend YieldN/A

Average Volume (3M)82.59K

Price to Earnings (P/E)―

Beta (1Y)0.25

Revenue Growth25.55%

EPS Growth61.22%

CountryUS

Employees335

SectorTechnology

Sector Strength80

IndustrySoftware - Application

Share Statistics

EPS (TTM)-0.17

Shares Outstanding112,054,380

10 Day Avg. Volume147,124

30 Day Avg. Volume82,591

Financial Highlights & Ratios

PEG Ratio2.19

Price to Book (P/B)0.47

Price to Sales (P/S)0.00

P/FCF Ratio-24.94

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$4.68

Price Target Upside121.80% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering5

Waldencast Acquisition Business Overview & Revenue Model

Company DescriptionWaldencast Acquisition Corp. is a special purpose acquisition company (SPAC) focused on the beauty and wellness sectors. It aims to identify and merge with high-growth companies within these industries, leveraging its expertise and capital to enhance the value and growth potential of its targets. Waldencast seeks to partner with innovative brands that have strong market positioning and potential for expansion.

How the Company Makes MoneyWaldencast Acquisition Corp. generates revenue primarily through the acquisition and subsequent growth of companies within the beauty and wellness sectors. The company initially raises capital through its initial public offering (IPO) as a SPAC. Once it identifies and merges with a target company, Waldencast aims to enhance the operational efficiencies and market reach of the acquired company, thus increasing its value. The revenue model is centered on the appreciation of the acquired company's value, which can lead to profits through increased stock prices, dividends, or eventual sale. Additionally, Waldencast may benefit from management fees or advisory roles in its acquired companies. Significant partnerships or investments in high-potential brands also contribute to its earnings.

Waldencast Acquisition Financial Statement Overview

Summary

Waldencast Acquisition displays strong revenue growth and a solid gross profit margin, indicating operational efficiency. However, ongoing challenges with profitability, negative operating cash flow, and net losses hinder financial performance. The balance sheet is stable with a favorable equity position and moderate leverage, but negative operating cash flow needs improvement for better financial health.

Income Statement

Neutral

Waldencast Acquisition has demonstrated revenue growth from 2023 to 2024, with a notable increase of 25.5% in total revenue. However, the company is still not profitable, as indicated by negative net income and EBIT margins. The gross profit margin shows strength at 70% for 2024, suggesting efficient production processes, but the negative EBIT margin of -21.4% highlights ongoing operational challenges.

Balance Sheet

Positive

The balance sheet reflects a solid equity base with an equity ratio of 67.9%, indicating financial stability. The debt-to-equity ratio remains manageable at 0.27, suggesting the company is not overly reliant on debt financing. However, the return on equity is negative due to persistent losses, indicating inefficiencies in generating returns from shareholders' equity.

Cash Flow

Neutral

Cash flow analysis reveals negative free cash flow, although there is an improvement from 2023 to 2024. The operating cash flow remains negative, indicating challenges in generating cash from core operations. The free cash flow to net income ratio is not meaningful due to negative values, highlighting cash constraints.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
240.40M	273.87M	218.14M	166.13M	142.47M	94.43M
	Gross Profit
167.60M	191.74M	141.58M	39.44M	87.44M	65.33M
	EBIT
47.50M	-58.58M	-81.93M	-74.27M	-1.63M	528.00K
	EBITDA
97.37M	28.63M	-33.54M	-99.25M	15.05M	13.94M
	Net Income Common Stockholders
-91.11M	-42.44M	-89.98M	-116.62M	-19.58M	-2.37M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
19.69M	14.80M	22.58M	8.69M	12.79M	0.00
	Total Assets
1.01B	975.86M	1.04B	1.09B	184.59M	166.79K
	Total Debt
171.53M	182.11M	177.72M	199.25M	118.86M	0.00
	Net Debt
151.84M	167.30M	155.15M	190.55M	106.07M	0.00
	Total Liabilities
253.21M	245.92M	273.44M	290.18M	145.35M	177.74K
	Stockholders Equity
618.61M	662.32M	624.63M	639.24M	39.24M	-10.95K
Cash Flow		Free Cash Flow
-12.67M	-11.83M	-31.82M	-87.51M	2.24M	-9.14M
	Operating Cash Flow
-11.38M	-8.82M	-29.77M	-85.01M	3.53M	-7.43M
	Investing Cash Flow
-1.40M	-2.92M	-1.99M	-545.28M	-3.79M	-1.71M
	Financing Cash Flow
11.31M	5.58M	44.33M	633.35M	5.16M	14.32M

Waldencast Acquisition Technical Analysis

Technical Analysis Sentiment

Negative

Last Price2.11

Price Trends

50DMA

2.83

Negative

100DMA

3.10

Negative

200DMA

3.26

Negative

Market Momentum

MACD

-0.10

Positive

RSI

32.87

Neutral

STOCH

15.16

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WALD, the sentiment is Negative. The current price of 2.11 is below the 20-day moving average (MA) of 2.72, below the 50-day MA of 2.83, and below the 200-day MA of 3.26, indicating a bearish trend. The MACD of -0.10 indicates Positive momentum. The RSI at 32.87 is Neutral, neither overbought nor oversold. The STOCH value of 15.16 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WALD.

Waldencast Acquisition Risk Analysis

Waldencast Acquisition disclosed 100 risk factors in its most recent earnings report. Waldencast Acquisition 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

Waldencast Acquisition Peers Comparison

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GILT	71 Outperform	$379.16M	15.35	8.58%	―	14.79%	5.04%
XPER	61 Neutral	$364.58M	―	-4.71%	―	-4.77%	84.82%
Sector *	60 Neutral	$11.62B	10.48	-7.27%	2.93%	7.46%	-10.64%
AEVA	54 Neutral	$1.01B	―	-113.70%	―	95.90%	10.38%
SNDL	52 Neutral	$347.35M	―	-9.20%	―	-3.02%	26.00%
WALD	51 Neutral	$258.94M	―	-6.60%	―	25.55%	61.22%
NNDM	47 Neutral	$342.01M	―	-9.36%	―	―	―

* Technology Sector Average

Performance Comparison

WALD

Waldencast Acquisition

2.11

-2.24

-51.49%

GILT

Gilat

6.68

1.32

24.63%

NNDM

Nano Dimension

1.56

-1.07

-40.68%

SNDL

1.35

-1.05

-43.75%

AEVA

Aeva Technologies

18.44

14.97

431.41%

XPER

Xperi Inc

7.98

-1.33

-14.29%

Waldencast Acquisition Earnings Call Summary

Earnings Call Date:May 13, 2025

(Q1-2025)

% Change Since: -30.36%|

Next Earnings Date:Aug 18, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mixed outlook. While there were notable achievements such as strong gross profit margins and successful product launches, there were also significant challenges including overall revenue decline and supply chain issues. The strategic initiatives and partnerships indicate potential for future growth, but immediate financial and operational hurdles remain.

Q1-2025 Updates

Positive Updates

Strong Gross Profit Margin

Adjusted gross profit margin remained strong at 76.4%, increasing by 10 basis points year-over-year.

Obagi Medical Revenue Growth

Obagi Medical achieved net revenue of $36.2 million, increasing 7.1% from the first quarter of 2024.

Successful Launch of Hydro Grip Gel Skin Tint

The launch was highly successful, selling out quickly due to demand exceeding forecast, contributing to high single-digit growth in US retail sales for Milk Makeup.

Strategic Partnership with Ulta

Milk Makeup's launch into Ulta Beauty resulted in strong consumer demand and high initial sell-out.

Reduction in Legal Costs

The company reported a substantial reduction in nonrecurring legal costs, with expectations for these costs to continue declining.

Negative Updates

Overall Revenue Decline

Reported net revenue of $65.4 million, representing a decline of 4.1% from the first quarter of last year.

Milk Makeup Revenue Decline

Milk Makeup saw a revenue decline of 15.1%, with challenges in international sales and inventory adjustments by retail partners.

Supply Chain Challenges

Obagi Medical faced supply chain disruptions and out-of-stock issues in key SKUs, impacting growth.

Increased Net Debt

Net debt increased to $172.1 million from $154.2 million at the end of 2024, primarily due to refinancing costs.

Company Guidance

During the Waldencast First Quarter 2025 Earnings Call, the company provided guidance reflecting confidence in achieving mid-teens net revenue growth and an adjusted EBITDA margin in the mid to high-teens for the full fiscal year 2025. The guidance incorporates several growth drivers, including the expansion of Milk Makeup's presence across brick-and-mortar and e-commerce channels, improvements in Obagi Medical's fulfillment rates, and the continued rollout of innovative products. In the first quarter, Waldencast reported net revenue of $65.4 million, a 4.1% decline year-over-year, with an adjusted gross profit margin of 76.4% and an adjusted EBITDA of $4.4 million, representing a margin of 6.7%. Despite challenges such as supply chain disruptions and international market comparisons, the company remains optimistic about its growth prospects, supported by strategic investments in marketing and operational improvements.

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.