Liquidity Services Earns ‘Buy’ Rating on Strong Q2 Performance and Growth Prospects

Analyst Gary Prestopino of Barrington maintained a Buy rating on Liquidity Services (LQDT – Research Report), with a price target of $27.00.

Gary Prestopino has given his Buy rating due to a combination of factors indicating strong performance and potential growth for Liquidity Services. The company’s second quarter results for fiscal year 2024 surpassed expectations, with adjusted EBITDA reaching $12.1 million, and non-GAAP EPS of $0.27, on a Gross Merchandise Volume (GMV) of $319.4 million. These figures not only exceeded Liquidity Services’ own guidance but also topped the consensus estimates, signaling effective operational control and a robust growth trajectory across all marketplaces. Additionally, the company saw significant year-over-year growth in transaction completion and auction participation, suggesting expanding market share and increasing buyer engagement on its platforms.
Furthermore, Prestopino notes particular strength in the RSCG segment, which achieved a record GMV thanks to its direct-to-consumer sales channel, AllSurplus Deals. The CAG segment also reported considerable growth with high-value transactions in key sectors, while the Machinio segment expanded its reach and customer base, including a foray into the Chinese market. Strategic acquisitions, such as Sierra Auction, are poised to enhance the company’s market position and create opportunities for cross-selling. Overall, the broad-based GMV growth paired with disciplined expense management, resulting in a non-GAAP adjusted EBITDA increase of 22%, underpins Prestopino’s optimistic outlook for Liquidity Services’ stock.

Based on the recent corporate insider activity of 22 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of LQDT in relation to earlier this year.

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Liquidity Services (LQDT) Company Description:

Liquidity Services, Inc. engages in the provision of e-commerce solutions to manage, value, and sell inventory and equipment for business and government clients. It operates through the following business segments: GovDeals; Capital Assets Group; Retail Supply Chain Group; Machinio; and Corporate and Other. The GovDeals segment provides self-service solutions in which sellers list their own assets, and it consists of marketplaces that enable local and state government. The CAG segment offers full-service solutions to sellers and it consists of marketplaces that enable federal government agencies as well as commercial businesses to sell surplus, salvage, and scrap assets. The RSCG segment consists of marketplaces that enable corporations located in the United States and Canada to sell surplus and salvage consumer goods and retail capital assets. The Machinio segment involves in the global online platform for listing used equipment for sale in the construction, machine tool, transportation, printing and agriculture sectors. The Corporate and Other segment comprises company’s IronDirect and TruckCenter operations. The company was founded by William P. Angrick III, Jaime Mateus-Tique and Benjamin Ronald Brown in November 1999 and is headquartered in Bethesda, MD.