Liquidity Services (LQDT) is Dead Money, Says Barrington Research

Barrington Research maintained a Market Perform rating on Liquidity Services (NASDAQ: LQDT). EPS and adjusted EBITDA estimates were cut to $1.09 and $71.6 million,
respectively vs $1.88 and $116 million.

"Based on FY/13 Non‐Rolling Stock original acquisition value (OAV) of $1.76 billion and an increase in acquisition costs for LSI from 1.80% to 4.35% of OAV, we have added $45 million of incremental cost of goods to our FY/15 estimate .In terms of the Rolling Stock portion of the business, we have assumed the loss of $9‐10 million of adjusted EBITDA from the potential loss of this contract. Our FY/15 assumptions also include significant expense reductions by LSI at least equal to the loss of adjusted EBITDA from the Rolling Stock portion of the DoD Surplus contract," said analyst Gary Prestopino.

"We believe at best the stock will be dead money as LSI adjusts its corporate structure for the changes to the DoD Surplus contract, while also rebuilding its GMV growth in its online markets," he added.

For an analyst ratings summary and ratings history on Liquidity Services click here. For more ratings news on Liquidity Services click here.

Shares of Liquidity Services closed at $18.36 yesterday.

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