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Waldencast (WALD)
NASDAQ:WALD
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Waldencast
(NASDAQ:WALD)
Rating:49Neutral
Price Target:
$2.00
▲(4.17% Upside)
Positive Factors
Brand Demand
Brand demand accelerated exiting the quarter, with management focusing on improving supply chain to meet this demand.
Innovation and Expansion
Growth is expected to accelerate progressively throughout the year driven by innovation and continued expansion of the distribution footprint in the US and internationally.
Sales Growth
Waldencast's brands will continue to see strong sales growth driven by strong global prestige beauty demand and newness and innovation driving demand for Milk.
Negative Factors
Profitability Challenges
Near-term expenses continue to pressure overall profitability and cash flow generation.
Revenue and Earnings Miss
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.
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 (WALD) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$230.72M
Dividend YieldN/A
Average Volume (3M)101.31K
Price to Earnings (P/E)―
Beta (1Y)0.54
Revenue Growth25.55%
EPS Growth61.22%
CountryUS
Employees335
SectorConsumer Defensive
Sector Strength67
IndustrySoftware - Application
Share Statistics
EPS (TTM)-0.17
Shares Outstanding112,054,380
10 Day Avg. Volume139,231
30 Day Avg. Volume101,313
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)0.00
Price to Sales (P/S)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap2.96
Enterprise Value/Revenue2.50
Enterprise Value/Gross Profit3.57
Enterprise Value/Ebitda1.13K
Forecast
1Y Price Target
$3.23Price Target Upside68.23% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering4
Waldencast Business Overview & Revenue Model
Company DescriptionWaldencast Acquisition Corp. a skin care company, provides advanced skin care treatments. Its products are designed to help minimize the appearance of premature skin aging, skin damage, hyperpigmentation, acne, and sun damage primarily available through dermatologists, plastic surgeons, medical spas, and other skin care professionals. Its portfolio includes Obagi Medical that provides transformational skin care products formulated to minimize signs of skin aging, address dark spots, hyperpigmentation, fine lines, and wrinkles and to protect and enhance skin tone and texture; and Obagi Clinical that offers skin care products designed to prevent the early signs of skin aging. The company was founded in 1988 and is based in White Plains, New York.
How the Company Makes MoneyWaldencast makes money primarily through the acquisition, development, and management of beauty and wellness brands. The company's revenue model involves purchasing promising brands and leveraging its operational expertise to enhance their market presence and profitability. Key revenue streams include the sale of beauty and personal care products through various distribution channels, including retail partnerships and e-commerce platforms. Strategic partnerships and collaborations with retailers and other industry players also contribute to its earnings, enabling Waldencast to access broader markets and optimize its brand portfolio's growth potential.
Waldencast Earnings Call Summary
Earnings Call Date:May 13, 2025
(Q1-2025)
| % Change Since: -36.63%|
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.Waldencast Financial Statement Overview
Summary
Waldencast Acquisition exhibits promising revenue growth and a strong gross profit margin, yet faces significant challenges with profitability and cash generation. Despite a solid balance sheet with a favorable equity position and moderate leverage, the company struggles with negative operating cash flow and net losses.Income Statement
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.60
Neutral
Balance Sheet
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.65
Positive
Cash Flow
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.45
Neutral
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 273.87M | 218.14M | 166.13M | 142.47M | 94.43M |
| Gross Profit | 191.74M | 141.58M | 39.44M | 87.44M | 65.33M |
| EBITDA | 28.63M | -33.54M | -99.25M | 15.05M | 13.94M |
| Net Income | -42.44M | -89.98M | -116.62M | -19.58M | -2.37M |
Balance Sheet | |||||
| Total Assets | 975.86M | 1.04B | 1.09B | 184.59M | 166.79K |
| Cash, Cash Equivalents and Short-Term Investments | 14.80M | 22.58M | 8.69M | 12.79M | 0.00 |
| Total Debt | 182.11M | 177.72M | 199.25M | 118.86M | 0.00 |
| Total Liabilities | 245.92M | 273.44M | 290.18M | 145.35M | 177.74K |
| Stockholders Equity | 662.32M | 624.63M | 639.24M | 39.24M | -10.95K |
Cash Flow | |||||
| Free Cash Flow | -11.83M | -31.82M | -87.51M | 2.24M | -9.14M |
| Operating Cash Flow | -8.82M | -29.77M | -85.01M | 3.53M | -7.43M |
| Investing Cash Flow | -2.92M | -1.99M | -545.28M | -3.79M | -1.71M |
| Financing Cash Flow | 5.58M | 44.33M | 633.35M | 5.16M | 14.32M |
Waldencast Technical Analysis
Neutral
1.92
Price Trends
2.27
Negative
2.47
Negative
2.93
Negative
Market Momentum
-0.18
Positive
44.38
Neutral
52.70
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WALD, the sentiment is Neutral. The current price of 1.92 is below the 20-day moving average (MA) of 2.01, below the 50-day MA of 2.27, and below the 200-day MA of 2.93, indicating a bearish trend. The MACD of -0.18 indicates Positive momentum. The RSI at 44.38 is Neutral, neither overbought nor oversold. The STOCH value of 52.70 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for WALD.
Waldencast Risk Analysis
Waldencast disclosed 100 risk factors in its most recent earnings report. Waldencast 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 3 New Risks
1.
Risks Related to Internal Controls and Financial Reporting Q4, 2023
2.
Risks Relating to our Business Operations and Financial Condition Q4, 2023
3.
Risks Related to the Ownership of our Securities Q4, 2023
Waldencast Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $194.53M | 31.35 | 4.19% | ― | 13.19% | 9.39% | |
63 Neutral | $21.01B | 14.53 | -7.26% | 3.13% | 3.36% | -7.91% | |
62 Neutral | $301.81M | ― | -28.14% | ― | 14.78% | 21.87% | |
61 Neutral | $321.21M | 1.83 | -10.56% | 7.65% | -17.17% | 497.89% | |
54 Neutral | $213.65M | ― | -22.60% | ― | -6.88% | 15.83% | |
49 Neutral | $230.72M | ― | -6.60% | ― | 25.55% | 61.22% | |
48 Neutral | $239.41M | ― | -105.81% | ― | -10.85% | -15.09% |
* Consumer Defensive Sector Average
Performance Comparison
WALD
Waldencast
1.92
-0.78
-28.89%
MKTW
MarketWise
19.76
3.69
22.96%
NRDY
Nerdy
1.33
0.45
51.14%
FRGE
Forge Global Holdings
21.63
1.83
9.24%
ONTF
ON24
5.23
-0.94
-15.24%
PERF
Perfect Corp
1.90
-0.11
-5.47%
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.