Northann Corp. (NYSE: NCL)

Sector: Consumer Cyclical Industry: Furnishings, Fixtures & Appliances CIK: 0001923780
Market Cap 1.71 Mn
P/B 0.93
P/E -0.10
P/S 0.13
ROIC (Qtr) -161.30
Div Yield % 0.00
Rev 1y % (Qtr) 38.62
Total Debt (Qtr) 5.76 Mn
Debt/Equity (Qtr) 3.12
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About

Northann Corp., known by its ticker symbol NCL, operates in the additive manufacturing industry, providing one-stop decorating solutions through its cutting-edge 3D printing technology. The company's mission is to deliver high-quality, affordable products while contributing to the development of the additive manufacturing sector. Northann Corp.'s primary business activities revolve around the production of vinyl flooring panels, which are manufactured using proprietary 3D printing technologies like Infinite Glass, DSE, TruBevel, and MattMaster....

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Investment thesis

Bull case

  • Tangible assets of 13.97M provide exceptional 8.76x coverage of deferred revenue 1.59M, showing strong service capability backing.
  • Operating cash flow of (5.42M) fully covers other non-current liabilities (1.59M) by 3.40x, showing strong long-term stability.
  • Tangible assets of 13.97M provide robust 8.76x coverage of other current liabilities 1.59M, indicating strong asset backing.
  • R&D investment of 518882 represents healthy 0.33x of deferred revenue 1.59M, indicating strong future innovation pipeline.
  • Strong tangible asset base of 13.97M provides 14.20x coverage of intangibles 983920, indicating robust asset quality.

Bear case

  • With cash reserves of 40883 against inventory of 3.48M, the 0.01 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Investment activities of (966139) provide weak support for R&D spending of 518882, which is -1.86x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating cash flow of (5.42M) provides insufficient coverage of deferred revenue obligations of 1.59M, which is -3.40x, raising concerns about future service delivery capabilities.
  • The company's operating cash flow of (5.42M) shows concerning coverage of stock compensation expenses of 8.02M, with a -0.68 ratio indicating potential earnings quality issues.
  • Free cash flow of (6.39M) provides weak coverage of capital expenditures of 966139, with a -6.61 ratio suggesting additional external financing needs for growth initiatives.

Peer comparison

Companies in the Furnishings, Fixtures & Appliances
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 SGI Somnigroup International Inc. 18.99 Bn 125.40 7.03 6.62 Bn
2 SN SharkNinja, Inc. 18.48 Bn 32.14 3.04 0.89 Bn
3 MHK Mohawk Industries Inc 8.23 Bn 19.54 0.77 2.34 Bn
4 PATK Patrick Industries Inc 5.10 Bn 175.24 10.70 1.53 Bn
5 WHR Whirlpool Corp /De/ 4.88 Bn 15.36 0.31 7.19 Bn
6 HNI Hni Corp 2.23 Bn 44.66 1.16 0.46 Bn
7 TILE Interface Inc 2.17 Bn 30.23 2.24 0.39 Bn
8 LEG Leggett & Platt Inc 1.59 Bn 5.64 0.39 1.66 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.48 0.98
EV to Cash from Ops. EV/CFO -1.32 -9.92
EV to Debt EV to Debt 1.24 25.70
EV to EBIT EV/EBIT -0.41 17.69
EV to EBITDA EV/EBITDA -0.52 15.96
EV to Free Cash Flow [EV/FCF] EV/FCF -1.12 17.28
EV to Market Cap EV to Market Cap 4.18 1.76
EV to Revenue EV/Rev 0.55 1.40
Price to Book Value [P/B] P/B 0.93 9.34
Price to Earnings [P/E] P/E -0.10 16.89
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 1.74
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 9.37
Dividend per Basic Share Div per Share (Qtr) 0.00 0.51
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 28.74
Interest Coverage Int. cover (Qtr) -72.01 -23.23
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -183.20 -9.80
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -53.40 70.23
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 0.00
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -605.25 -367.80
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -386.14 -34.93
EBIT Growth (1y) % EBIT 1y % (Qtr) -607.24 -198.55
EBT Growth (1y) % EBT 1y % (Qtr) -327.04 -72.49
EPS Growth (1y) % EPS 1y % (Qtr) 2.19 -131.79
FCF Growth (1y) % FCF 1y % (Qtr) -98.04 0.53
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -146.65 -2.36
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.87 1.16
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.13
Cash Ratio Cash Ratio (Qtr) 0.00 0.30
Current Ratio Curr Ratio (Qtr) 0.73 1.96
Debt to Equity Ratio Debt/Equity (Qtr) 3.12 0.57
Interest Cover Ratio Int Coverage (Qtr) -72.01 -23.23
Times Interest Earned Times Interest Earned (Qtr) -72.01 -23.23
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -125.70 -2.26
EBIT Margin % EBIT Margin % (Qtr) -133.80 -4.46
EBT Margin % EBT Margin % (Qtr) -135.66 -7.49
Gross Margin % Gross Margin % (Qtr) -15.80 33.73
Net Profit Margin % Net Margin % (Qtr) -135.60 -8.04