Solo Brands, Inc. (NYSE: SBDS)

Sector: Consumer Cyclical Industry: Internet Retail CIK: 0001870600
Market Cap 10.12 Mn
P/B 0.10
P/E -0.13
P/S 0.03
ROIC (Qtr) -24.60
Div Yield % 0.00
Rev 1y % (Qtr) -43.66
Total Debt (Qtr) 251.47 Mn
Debt/Equity (Qtr) 2.54

About

Solo Brands, Inc., often recognized by its stock symbol DTC, operates in the outdoor recreation industry. The company's mission is to inspire moments that create lasting memories through its "create good" philosophy, which focuses on designing products that foster positive experiences. Solo Brands generates revenue through its e-commerce platforms and wholesale partnerships with key retailers, offering a variety of products and services. Solo Brands' primary business activities involve designing, manufacturing, and distributing premium outdoor...

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Price action

Investment thesis

Bull case

  • Healthy cash reserves of 16.33M provide 13.61x coverage of short-term debt 1.20M, demonstrating strong liquidity position and minimal refinancing risk.
  • Tangible assets of 180.71M provide exceptional 150.59x coverage of deferred revenue 1.20M, showing strong service capability backing.
  • Tangible assets of 180.71M provide robust 6.41x coverage of other current liabilities 28.20M, indicating strong asset backing.
  • Cash reserves of 16.33M provide solid 2.86x coverage of other non-current liabilities 5.71M, indicating strong liquidity.
  • Cash position of 16.33M provides strong 13.61x coverage of deferred revenue 1.20M, ensuring service delivery capability.

Bear case

  • With cash reserves of 16.33M against inventory of 84.83M, the 0.19 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Operating cash flow of (40.03M) provides insufficient coverage of deferred revenue obligations of 1.20M, which is -33.36x, raising concerns about future service delivery capabilities.
  • The company's operating cash flow of (40.03M) shows concerning coverage of stock compensation expenses of 4.18M, with a -9.58 ratio indicating potential earnings quality issues.
  • Free cash flow of (52.62M) provides weak coverage of capital expenditures of 12.59M, with a -4.18 ratio suggesting additional external financing needs for growth initiatives.
  • Operating cash flow of (40.03M) provides minimal -15.96x coverage of tax expenses of 2.51M, suggesting potential tax planning inefficiencies or unsustainable tax positions.

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 0.58 1.64
EV to Cash from Ops. EV/CFO -6.21 10.76
EV to Debt EV to Debt 0.99 18.39
EV to EBIT EV/EBIT -4.74 20.59
EV to EBITDA EV/EBITDA -4.89 20.75
EV to Free Cash Flow [EV/FCF] EV/FCF -4.72 16.58
EV to Market Cap EV to Market Cap 24.55 -3.15
EV to Revenue EV/Rev 0.68 -4.05
Price to Book Value [P/B] P/B 0.10 5.50
Price to Earnings [P/E] P/E -0.13 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) -2.30 -1,581.43
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 7.85 -39.45
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 30.73 53.91
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 1.00
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 71.31 37.93
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 84.00 -62.59
EBIT Growth (1y) % EBIT 1y % (Qtr) 76.89 8.33
EBT Growth (1y) % EBT 1y % (Qtr) 68.76 -10.66
EPS Growth (1y) % EPS 1y % (Qtr) 60.86 13.44
FCF Growth (1y) % FCF 1y % (Qtr) -838.35 -46.02
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -18.63 23.19
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.85 1.17
Cash Payout Ratio Cash Payout (Qtr) 0.00 -0.04
Cash Ratio Cash Ratio (Qtr) 0.41 2.14
Current Ratio Curr Ratio (Qtr) 3.20 3.56
Debt to Equity Ratio Debt/Equity (Qtr) 2.54 0.52
Interest Cover Ratio Int Coverage (Qtr) -2.30 -1,581.43
Times Interest Earned Times Interest Earned (Qtr) -2.30 -1,581.43
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -3.10 4.40
EBIT Margin % EBIT Margin % (Qtr) -14.31 -36.99
EBT Margin % EBT Margin % (Qtr) -20.53 -40.80
Gross Margin % Gross Margin % (Qtr) 59.80 44.74
Net Profit Margin % Net Margin % (Qtr) -21.20 -40.62