Winmark (WINA) AI Stock Analysis

• Market Cap: $1.29B
• Dividend Yield: 1.05%
• Average Volume (3M): 293.82K
• Price to Earnings (P/E): 32.5
• Beta (1Y): 0.47
• Revenue Growth: 0.33%
• EPS Growth: 1.50%
• Country: US
• Employees: 89
• Sector: Consumer Cyclical
• Sector Strength: 59
• Industry: Specialty Retail
• EPS (TTM): 11.20
• Shares Outstanding: 3,532,010
• 10 Day Avg. Volume: 88,711
• 30 Day Avg. Volume: 293,820
• PEG Ratio: 5.27
• Price to Book (P/B): -13.35
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 20.51
• Enterprise Value/Market Cap: 0.59
• Enterprise Value/Revenue: 2.32
• Enterprise Value/Gross Profit: 9.56
• Enterprise Value/Ebitda: 3.48
• 1Y Price Target: $451.00
• Price Target Upside: 22.87% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 55 Neutral
• Price Target: $385.00 ▲(4.89%Upside)

The overall score reflects the company's strong profitability and shareholder returns, balanced against financial instability due to high leverage and negative equity. The technical indicators show a bearish trend, slightly offset by oversold signals. A high P/E ratio suggests potential overvaluation, but the dividend yield adds positive value.

Positive Factors

Shareholder Returns

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

Sustainability and Recommerce

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

Negative Factors

Financial Performance

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

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 makes money primarily through franchise fees and royalties. The company licenses its brand names and business systems to franchisees, who operate their own stores under Winmark's established brands. Franchisees pay an initial franchise fee to open a store, as well as ongoing royalties based on a percentage of their sales. This model allows Winmark to expand its brand presence with relatively low capital expenditure, as franchisees bear the cost of opening and operating individual stores. Additionally, Winmark provides franchise support services, which may include training, advertising, and operational guidance, generating further revenue. The company's earnings are influenced by the success of its franchisees, the demand for resale goods, and consumer trends favoring sustainable shopping options.

Winmark Financial Statement Overview

Summary

Winmark demonstrates strong profitability and operational efficiency, with high margins. However, it faces significant financial risks due to negative equity and high leverage. Cash flow generation is positive, but 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	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	83.10M	81.29M	83.24M	81.41M	78.22M	66.06M
Gross Profit	79.87M	77.91M	78.38M	76.71M	73.43M	61.34M
EBITDA	56.25M	55.20M	55.52M	54.57M	52.01M	41.11M
Net Income	41.09M	39.95M	40.18M	39.42M	39.92M	29.82M
Balance Sheet
Total Assets	37.06M	27.66M	28.97M	30.46M	26.90M	31.34M
Cash, Cash Equivalents and Short-Term Investments	21.83M	12.33M	13.36M	13.96M	14.30M	15.35M
Total Debt	62.88M	63.04M	72.78M	77.57M	52.42M	28.85M
Total Liabilities	83.00M	78.71M	88.12M	92.09M	65.98M	42.72M
Stockholders Equity	-45.94M	-51.05M	-59.16M	-61.63M	-39.08M	-11.38M
Cash Flow
Free Cash Flow	43.71M	41.96M	43.61M	40.11M	48.06M	39.06M
Operating Cash Flow	43.87M	42.16M	43.99M	43.79M	48.35M	43.22M
Investing Cash Flow	-158.20K	-194.90K	-383.90K	-3.67M	-283.10K	-4.16M
Financing Cash Flow	-44.62M	-43.02M	-43.90M	-37.88M	-43.31M	-57.56M

Winmark Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 367.06
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WINA, the sentiment is Negative. The current price of 367.06 is below the 20-day moving average (MA) of 397.60, below the 50-day MA of 402.77, and below the 200-day MA of 376.15, indicating a bearish trend. The MACD of -12.69 indicates Positive momentum. The RSI at 35.57 is Neutral, neither overbought nor oversold. The STOCH value of 29.93 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WINA.

Winmark Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LQDT	73 Outperform	$767.72M	30.93	14.01%	―	35.78%	23.49%
OXM	66 Neutral	$681.20M	8.86	13.63%	6.05%	-2.47%	99.50%
WWW	66 Neutral	$1.58B	22.45	25.29%	2.06%	-13.05%	―
SVV	64 Neutral	$1.61B	71.22	6.13%	―	2.97%	-63.56%
Sector *	63 Neutral	$16.70B	11.33	-6.96%	2.94%	1.73%	-24.85%
WINA	55 Neutral	$1.29B	32.50	-118.80%	1.05%	0.33%	1.50%
LEG	53 Neutral	$1.36B	―	-50.35%	1.98%	-6.50%	-221.33%

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.