Liquidity Services Shares Soar After Topping Estimates, Here’s What to Expect

    Author Siraj SarwarPosted on Categories Consumer, RetailTags , , , , , , , , , , , , , , , , , ,

    Finally, Liquidity Services Inc.’s (NASDAQ:LQDT) stock experienced some support after topping the revenue and earnings estimates by a wide margin. The stock soared more than 27% after the huge selloff in the last five years.

    source Image: finviz.com

    Higher Financials Provided the Support to Beaten-Down Stock

    The company’s stock tumbled sharply in the past five years, due to the steady decline in revenue and earnings.  Liquidity Services revenue declined on average of 18% in the past three years, when industry average increased at 7%. Consequently, LQDT stock tumbled more than 85% in the past five years, down 50% in the past twelve months.

    However, the stock gained support after beating revenue estimates by $0.98 million. Its earnings also topped the consensus earnings estimate by $0.18 per share. Stock rallied above 27% after the earnings announcement. Liquidity Services stock currently trades around $6 a share. The stock has the 52-week trading range of $4.34-$9.95. The trading volume also increased to 435,973 shares, higher from the daily average of 124,460 shares.

    Is the Rally Sustainable?

    Although the company topped revenue and earnings estimates, its financial numbers were lower when compared to the past year period. Its revenue of $61 million declined 13% over the past year period.

    Its CEO said: 

    “Though not satisfied, we are encouraged by our Q1-FY18 results as we focus on our growth initiatives to increase market share in our target verticals by expanding relationships with our sellers, buyers, and partners; expand our flexible service offerings for sellers; enhance our buyer experience; and drive operational efficiencies across every part of our business.”

    Investors are cheering the client growth in its Retail Supply Chain Group (RSCG) and GovDeals segments and the sequential expansion in commercial sales volumes in Capital Asset Group (CAG). The company expects to generate better results in the coming days, driven by several contract wins and the improvement in energy sectors. Overall, the stock performance will depend highly on the future financial numbers of Liquidity Services.   

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    Author Siraj Sarwar
    About the author: Based in Saudi Arabia, Siraj has a strong understanding of and passion for accounting and finance. He has worked for international clients for many years on several projects related to the stock market, equity research and other business, accounting and finance related projects. Siraj is a published financial analyst on the world's leading websites including SeekingAlpha, TheStreet, MSN, and others.