CaesarStone Sdot-Yam (CSTE) AI Stock Analysis

• Market Cap: $85.35M
• Dividend Yield: N/A
• Average Volume (3M): 103.02K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.52
• Revenue Growth: -20.34%
• EPS Growth: 53.57%
• Country: US
• Employees: 1,532
• Sector: Industrials
• Sector Strength: 82
• Industry: Construction
• EPS (TTM): -0.29
• Shares Outstanding: 34,555,830
• 10 Day Avg. Volume: 64,782
• 30 Day Avg. Volume: 103,019
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 2.10
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 1.86
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $5.00
• Price Target Upside: 131.48% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

CaesarStone Sdot-Yam's overall score reflects substantial financial challenges, with declining revenues and profit margins. The technical analysis indicates a bearish trend, and the valuation is unattractive due to losses. Despite some operational improvements noted in the earnings call, macroeconomic challenges and legal liabilities weigh heavily on the outlook.

Positive Factors

Cost Savings and Demand Recovery

With an incremental ~$10M of cost savings to be realized and continued gross margin improvement expected, the company remains well positioned to capitalize on the eventual demand recovery.

Gross Margin Improvement

The company’s improved production footprint not only offset pressure from unfavorable product mix and lower fixed cost absorption but resulted in a ~80bps expansion of gross margin.

Potential Upside

There are signs the worst is behind the Company, and should macro relief come as self-help initiatives take full hold, there could be material upside to numbers and valuation for this business.

Negative Factors

Weak R&R Activity

The run of extraordinarily weak R&R activity is expected to continue with another significant decline in sales and comparable adjusted EBITDA.

Weaker Than Expected Results

Caesarstone reported weaker than anticipated results as persistent macro headwinds continue to suppress demand while unfavorable product mix placed additional pressure on margins.

CaesarStone Sdot-Yam Business Overview & Revenue Model

Company Description

CaesarStone Sdot-Yam (CSTE) is a leading global manufacturer and designer of premium quartz surfaces, primarily used in both residential and commercial applications. The company is headquartered in Sdot-Yam, Israel, and operates within the construction and home improvement sectors. CaesarStone's core products include a wide variety of quartz countertops and surfaces known for their durability, design flexibility, and aesthetic appeal.

How the Company Makes Money

CaesarStone Sdot-Yam generates revenue through the manufacture and sale of quartz surfaces, which are distributed worldwide through a network of distributors, retailers, and direct sales channels. The company's key revenue streams include sales to the residential market, where quartz surfaces are used primarily in kitchens and bathrooms, and to the commercial market, which includes applications in hotels, restaurants, and office buildings. CaesarStone also benefits from strategic partnerships with home improvement retailers and interior design firms, which help to enhance its market presence and drive sales. Additionally, the company's commitment to innovation and product development ensures a steady introduction of new designs and products, contributing to sustained revenue growth.

CaesarStone Sdot-Yam Financial Statement Overview

Summary

CaesarStone's financial performance is challenging, characterized by declining revenue and profit margins and increased leverage. However, the company maintains liquidity and recently reported positive free cash flow, which mitigates some concerns.

Income Statement

CaesarStone Sdot-Yam has experienced declining revenue over the years, with a significant drop from 2022 to 2024. Gross profit margins have also declined from 2020 to 2024, indicating increased cost pressures or competitive pricing. The net profit margin is negative due to consecutive net losses, raising concerns about long-term profitability. The company has been unable to maintain stable EBIT and EBITDA margins, with negative figures in recent years, highlighting operational inefficiencies or market challenges.

Balance Sheet

The balance sheet reflects a moderate level of stability with a debt-to-equity ratio that has increased over time, indicating rising leverage. However, equity has decreased, reducing financial flexibility. The equity ratio has dropped, suggesting a decline in asset financing through equity. Despite these concerns, the company maintains a reasonable level of cash and short-term investments, providing some buffer against financial uncertainties.

Cash Flow

The cash flow statement shows a volatile trend in operating cash flow and free cash flow. While the company managed to generate positive free cash flow in the latest period, it has seen significant fluctuations over the years. The operating cash flow to net income ratio is unstable, and the free cash flow to net income ratio emphasizes the challenges in converting revenue into cash flow. These factors suggest cash flow management issues that need attention.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
443.22M	565.23M	690.81M	643.89M	486.41M
	Gross Profit
96.67M	91.94M	163.25M	171.50M	133.94M
	EBIT
-41.89M	-88.03M	84.97M	27.43M	35.16M
	EBITDA
-20.61M	-51.62M	-13.30M	61.41M	58.30M
	Net Income Common Stockholders
-42.83M	-107.66M	-56.37M	18.97M	7.22M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
106.34M	91.12M	59.16M	85.54M	122.36M
	Total Assets
549.04M	579.86M	752.98M	867.65M	820.92M
	Total Debt
136.86M	146.00M	155.59M	164.36M	148.77M
	Net Debt
79.52M	91.38M	103.51M	90.05M	34.52M
	Total Liabilities
275.26M	257.01M	324.03M	365.49M	325.87M
	Stockholders Equity
277.17M	315.06M	426.63M	499.88M	492.94M
Cash Flow		Free Cash Flow
21.45M	55.36M	-41.11M	-10.51M	27.79M
	Operating Cash Flow
31.87M	66.53M	-23.31M	20.97M	47.62M
	Investing Cash Flow
-24.36M	-40.53M	-7.29M	-36.66M	-68.31M
	Financing Cash Flow
-3.04M	-23.78M	9.16M	-23.76M	-6.08M

CaesarStone Sdot-Yam Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2.16
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CSTE, the sentiment is Negative. The current price of 2.16 is below the 20-day moving average (MA) of 2.72, below the 50-day MA of 2.82, and below the 200-day MA of 4.09, indicating a bearish trend. The MACD of -0.17 indicates Positive momentum. The RSI at 30.94 is Neutral, neither overbought nor oversold. The STOCH value of 5.52 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CSTE.

CaesarStone Sdot-Yam Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SFWL	72 Outperform	$84.14M	7.73	9.67%	―	24.75%	5.52%
TWIN	70 Outperform	$96.47M	10.21	2.77%	2.16%	11.49%	-66.66%
Sector *	64 Neutral	$4.30B	11.84	5.23%	249.82%	4.06%	-10.21%
CSTE	44 Neutral	$85.35M	―	-17.84%	―	-20.34%	53.57%
YGMZ	35 Underperform	$98.95M	―	-19.57%	―	-49.19%	-1214.66%