Winmark (WINA) AI Stock Analysis

• Market Cap: $1.28B
• Dividend Yield: 1%
• Average Volume (3M): 26.61K
• Price to Earnings (P/E): 32.4
• Beta (1Y): 0.56
• Revenue Growth: 0.33%
• EPS Growth: 1.50%
• Country: US
• Employees: 89
• Sector: Consumer Cyclical
• Sector Strength: 62
• Industry: Specialty Retail
• EPS (TTM): 11.20
• Shares Outstanding: 3,532,010
• 10 Day Avg. Volume: 27,634
• 30 Day Avg. Volume: 26,609
• PEG Ratio: 21.58
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 0.94
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 15.38
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $445.00
• Price Target Upside: 23.53% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

Winmark's overall stock score reflects its strong profitability and commitment to shareholder returns, as indicated by recent corporate events. However, financial instability due to negative equity and high leverage poses significant risks. Technical indicators suggest mixed momentum, and the valuation appears stretched with a high P/E ratio, which tempers the overall score.

Positive Factors

Business Strategy

Winmark is capitalizing on the shift in recommerce, driven by increasing interest in sustainability and the desire for value.

Dividends

The company increased the regular quarterly dividend, representing an annualized yield of 1.2%.

Shareholder Returns

For the first time in nine quarters, the company bought back shares.

Negative Factors

Financial Results

Winmark reported 4Q24 results with revenue and GAAP EPS slightly below projections.

Revenue Decline

Full year revenue of $81.3M declined 2.3% year over year, reflecting challenges in the business.

Sales Performance

Implied same-store sales grew 0.2%, below the 3.9% forecast, indicating a slight sequential decline.

Winmark Business Overview & Revenue Model

Company Description

Winmark Corporation, together with its subsidiaries, operates as a franchisor of retail store concepts that buy, sell, trade, and consign used merchandise primarily in the United States and Canada. The company operates through two segments, Franchising and Leasing. Its franchises retail stores operate under the Plato's Closet, Once Upon A Child, Play It Again Sports, Style Encore, and Music Go Round brand names. The company's Plato's Closet brand stores buys and sells used clothing and accessories for the teenage and young adult market; and Once Upon A Child brand stores buys and sells used and new children's clothing, toys, furniture, equipment, and accessories primarily to parents of children ages infant to 12 years. Its Play It Again Sports brand stores buys, sells, trades in, and used and new sporting goods, equipment, and accessories for various athletic activities, such as team sports, fitness, ski/snowboard, golf, and others; Style Encore brand stores buys and sells used women's apparel, shoes, and accessories; and Music Go Round brand stores buys, sells, trades in, and used and new musical instruments, speakers, amplifiers, music-related electronics, and related accessories. In addition, the company is also involved in the middle-market equipment leasing business focusing on technology and business-essential equipment. As of February 23, 2022, it had 1,271 franchised stores, as well as offers its products online at musicgoround.com, playitagainsports.com, and style-encore.com. Winmark Corporation was incorporated in 1988 and is headquartered in Minneapolis, Minnesota.

How the Company Makes Money

Winmark Corporation generates revenue primarily through its franchising business model. The company earns money from franchise fees, royalties, and advertising contributions paid by franchisees operating under its retail brands. Franchisees pay an initial franchise fee to open a store and ongoing royalties based on a percentage of their sales. Additionally, Winmark benefits from revenue streams such as leasing arrangements, financial services, and training provided to franchisees. The company's partnerships with franchisees are crucial, as they help expand the brand's reach and ensure consistent quality and service across all locations.

Winmark Financial Statement Overview

Summary

Winmark demonstrates strong profitability and operational efficiency, with high margins, but faces significant financial risks due to negative equity and high leverage. While cash flow generation is positive, high capital expenditures strain the cash position. The company needs to address its balance sheet weaknesses to maintain long-term financial health.

Income Statement

The company shows a strong gross profit margin of 96.1% and a robust net profit margin of 49.4% for the TTM period. However, revenue growth has been inconsistent with a slight decline from the previous year. EBIT and EBITDA margins are healthy at 65.3% and 67.7%, respectively, indicating strong operational efficiency.

Balance Sheet

The company has a negative stockholders' equity, resulting in a very high and concerning debt-to-equity ratio. Return on equity is not applicable due to negative equity, but the equity ratio is also negative, reflecting financial instability. These metrics highlight potential financial risks due to heavy reliance on debt financing.

Cash Flow

Free cash flow has slightly increased, but capital expenditures are extremely high, affecting cash flows negatively. The operating cash flow to net income ratio is positive, showing efficient cash earnings conversion. However, the overall cash flow situation is strained due to high capital expenditures.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
81.29M	83.24M	81.41M	78.22M	66.06M
	Gross Profit
77.91M	78.38M	76.71M	73.43M	61.34M
	EBIT
52.93M	53.28M	53.61M	51.34M	40.21M
	EBITDA
55.20M	55.52M	54.57M	52.01M	41.11M
	Net Income Common Stockholders
39.95M	40.18M	39.42M	39.92M	29.82M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
12.19T	13.36M	13.96M	14.30M	15.35M
	Total Assets
26.35T	28.97M	30.46M	26.90M	31.34M
	Total Debt
63.04T	72.78M	77.57M	52.42M	28.85M
	Net Debt
50.85T	59.42M	63.96M	41.01M	22.19M
	Total Liabilities
72.80T	88.12M	92.09M	65.98M	42.72M
	Stockholders Equity
-51.05T	-59.16M	-61.63M	-39.08M	-11.38M
Cash Flow		Free Cash Flow
41.96M	43.61M	40.11M	48.06M	39.06M
	Operating Cash Flow
42.16M	43.99M	43.79M	48.35M	43.22M
	Investing Cash Flow
-194.90K	-383.90K	-3.67M	-283.10K	-4.16M
	Financing Cash Flow
-43.02M	-43.90M	-37.88M	-43.31M	-57.56M

Winmark Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 360.23
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WINA, the sentiment is Positive. The current price of 360.23 is above the 20-day moving average (MA) of 343.16, above the 50-day MA of 331.24, and below the 200-day MA of 366.98, indicating a neutral trend. The MACD of 9.53 indicates Negative momentum. The RSI at 65.43 is Neutral, neither overbought nor oversold. The STOCH value of 86.80 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for WINA.

Winmark Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LQDT	74 Outperform	$988.29M	42.26	13.48%	―	32.16%	27.32%
SVV	67 Neutral	$1.50B	54.69	7.28%	―	2.49%	-49.97%
WWW	61 Neutral	$1.07B	22.72	15.57%	3.04%	-21.75%	―
Sector *	61 Neutral	$6.66B	11.71	2.96%	4.01%	2.64%	-20.91%
WINA	59 Neutral	$1.28B	32.35	-118.80%	1.00%	0.33%	1.50%
LEG	54 Neutral	$1.31B	―	-50.33%	2.08%	-6.54%	-221.33%
OXM	47 Neutral	$715.01M	8.19	15.71%	5.61%	-3.49%	52.67%

Winmark Corporate Events

Winmark Reports Strong Q1 2025 Financial Results

On April 16, 2025, Winmark Corporation announced its financial results for the first quarter ending March 29, 2025, reporting a net income of $9,956,400, or $2.71 per share diluted, an increase from the previous year’s $8,819,000 or $2.41 per share diluted. This quarter’s results included $2.2 million in leasing income from settling customer litigation. Additionally, the company declared a quarterly cash dividend of $0.96 per share, payable on June 2, 2025, to shareholders of record as of May 14, 2025. This announcement reflects Winmark’s strong financial performance and commitment to shareholder returns.

Spark’s Take on WINA Stock

According to Spark, TipRanks’ AI Analyst, WINA is a Neutral.

Winmark’s strong profitability and cash flow are overshadowed by financial instability risks due to high leverage. Technical indicators show negative momentum, suggesting caution. The valuation appears stretched with a high P/E ratio, while the recent dividend announcement is a positive signal.

To see Spark’s full report on WINA stock, click here.

Winmark Reports 2024 Financial Results with Minor Decline

Winmark Corporation announced its financial results for the year ended December 28, 2024, on February 19, 2025. The company reported a net income of $39,954,200 or $10.89 per share diluted, a slight decrease from the previous year. The revenue for 2024 was $81,289,100, down from $83,243,500 in 2023. This decrease was influenced by the company’s 2021 decision to run off its leasing portfolio. The announcement highlights the company’s stable operations despite a minor decline in net income and revenue.