Liquidity Services Inc (NASDAQ: LQDT)

Sector: Consumer Cyclical Industry: Internet Retail CIK: 0001235468
Market Cap 982.64 Mn
P/B 4.83
P/E 34.98
P/S 2.06
ROIC (Qtr) 10.18
Div Yield % 0.00
Rev 1y % (Qtr) 10.44
Total Debt (Qtr) 13.79 Mn
Debt/Equity (Qtr) 0.07

About

Liquidity Services, Inc. (LQDT), a prominent player in the global commerce industry, offers trusted online marketplace platforms that facilitate the circular economy. The company harnesses technology to extract and monetize the inherent value of surplus assets, thereby creating a more sustainable future for businesses, individuals, and the environment. Liquidity Services' diverse solutions cater to government entities, commercial businesses, and individual clients, facilitating the sale of surplus property and real estate assets through its GovDeals...

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Price action

Investment thesis

Bull case

  • Strong operating cash flow of 66.76M provides robust 4.84x coverage of total debt 13.79M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 174.61M provide 34.43x coverage of short-term debt 5.07M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 258.89M provides 18.77x coverage of total debt 13.79M, indicating robust asset backing and low credit risk.
  • Tangible assets of 258.89M provide exceptional 50.83x coverage of deferred revenue 5.09M, showing strong service capability backing.
  • Robust free cash flow of 58.96M exceeds capital expenditure of 7.80M by 7.56x, indicating strong organic growth funding capability.

Bear case

  • Operating cash flow of 66.76M barely covers its investment activities of (22.98M), with a coverage ratio of -2.90, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (22.98M) provide weak support for R&D spending of 68.54M, which is -0.34x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Cash reserves of 174.61M provide limited coverage of acquisition spending of (6.50M), which is -26.88x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • The company's operating cash flow of 66.76M shows concerning coverage of stock compensation expenses of 14.49M, with a 4.61 ratio indicating potential earnings quality issues.
  • Free cash flow of 58.96M represents just -578.02x of debt issuance (102000), suggesting concerning reliance on leverage rather than internal cash generation for growth.

Product and Service Breakdown of Revenue (2025)

Product and Service Breakdown of Revenue (2025)

Peer comparison

Companies in the Internet Retail
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 AMZN Amazon Com Inc 2,526.56 Bn 33.03 3.65 135.42 Bn
2 BABA Alibaba Group Holding Ltd 395.87 Bn 22.47 2.79 39.55 Bn
3 PDD PDD Holdings Inc. 149.89 Bn 10.44 2.55 1.50 Bn
4 MELI Mercadolibre Inc 106.40 Bn 51.23 4.06 9.88 Bn
5 DASH DoorDash, Inc. 88.88 Bn 103.00 7.03 3.26 Bn
6 SE Sea Ltd 73.28 Bn 51.67 3.48 4.24 Bn
7 EBAY Ebay Inc 64.91 Bn 5.04 6.46 7.02 Bn
8 JD JD.com, Inc. 42.35 Bn 9.36 0.23 15.74 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 2.24 1.64
EV to Cash from Ops. EV/CFO 12.60 10.76
EV to Debt EV to Debt 60.98 18.39
EV to EBIT EV/EBIT 21.33 20.59
EV to EBITDA EV/EBITDA 18.50 20.75
EV to Free Cash Flow [EV/FCF] EV/FCF 14.27 16.58
EV to Market Cap EV to Market Cap 0.86 -3.15
EV to Revenue EV/Rev 1.76 -4.05
Price to Book Value [P/B] P/B 4.83 5.50
Price to Earnings [P/E] P/E 34.98 36.85
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -93.84
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 -203.90
Dividend per Basic Share Div per Share (Qtr) 0.00 0.08
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 -3.46
Interest Coverage Int. cover (Qtr) 0.00 -1,581.43
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 12.43 -39.45
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 13.95 53.91
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 1.00
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 40.53 37.93
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 28.01 -62.59
EBIT Growth (1y) % EBIT 1y % (Qtr) 44.68 8.33
EBT Growth (1y) % EBT 1y % (Qtr) 44.68 -10.66
EPS Growth (1y) % EPS 1y % (Qtr) 37.88 13.44
FCF Growth (1y) % FCF 1y % (Qtr) -3.84 -46.02
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 12.77 23.19
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.27 1.17
Cash Payout Ratio Cash Payout (Qtr) 0.00 -0.04
Cash Ratio Cash Ratio (Qtr) 1.08 2.14
Current Ratio Curr Ratio (Qtr) 1.39 3.56
Debt to Equity Ratio Debt/Equity (Qtr) 0.07 0.52
Interest Cover Ratio Int Coverage (Qtr) 0.00 -1,581.43
Times Interest Earned Times Interest Earned (Qtr) 0.00 -1,581.43
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 10.50 4.40
EBIT Margin % EBIT Margin % (Qtr) 8.27 -36.99
EBT Margin % EBT Margin % (Qtr) 8.27 -40.80
Gross Margin % Gross Margin % (Qtr) 43.80 44.74
Net Profit Margin % Net Margin % (Qtr) 5.90 -40.62