Baird Latest to Defend Liquidity Services (LQDT) After Collapse
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Price: $43.47 +1.23%
Rating Summary:
5 Buy, 5 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
5 Buy, 5 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Baird is the latest analyst to come out in defense of Liquidity Services (NASDAQ: LQDT), which is being slammed 25 percent following a negative report which questioned the sustainability of margins and organic growth in the commercial business.
"While we agree with some points in the report, for example, that the government (Department of Defense) surplus segment of Liquidity Services generates higher margin than other segments, we also believe the report likely overstates the profit contribution from this segment," analyst Colin Sebastian said. "Importantly, we note that as the government segment has declined as a portion of revenues, that overall company profit margins have increased." As a reference, the analyst notes that adjusted EBITDA margins have increased in each year from 9.9% in F2008 to 15.7% in F2012.
"We also believe that the report likely overstates the contribution to organic Commercial segment growth from a new partner (Acer)," Sebastian said. He continues to expect 15% or better organic Commercial segment growth driven by new partners.
The firm maintained their Outperform rating and price target of $66.00
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 $51.18 yesterday.
"While we agree with some points in the report, for example, that the government (Department of Defense) surplus segment of Liquidity Services generates higher margin than other segments, we also believe the report likely overstates the profit contribution from this segment," analyst Colin Sebastian said. "Importantly, we note that as the government segment has declined as a portion of revenues, that overall company profit margins have increased." As a reference, the analyst notes that adjusted EBITDA margins have increased in each year from 9.9% in F2008 to 15.7% in F2012.
"We also believe that the report likely overstates the contribution to organic Commercial segment growth from a new partner (Acer)," Sebastian said. He continues to expect 15% or better organic Commercial segment growth driven by new partners.
The firm maintained their Outperform rating and price target of $66.00
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 $51.18 yesterday.
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