Flexsteel (FLXS) AI Stock Analysis

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Flexsteel

(NASDAQ:FLXS)

71Outperform

Flexsteel's strong financial performance, marked by solid revenue growth and a robust balance sheet, forms the bedrock of its overall appeal. However, technical indicators suggest caution due to bearish momentum. The stock's valuation offers potential appeal, but external risks from tariffs and demand volatility highlighted in the earnings call pose notable challenges. Overall, Flexsteel's strategic initiatives and financial stability support a moderately positive outlook.

Flexsteel (FLXS) vs. S&P 500 (SPY)

Market Cap

$176.71M

Dividend Yield2.11%

Average Volume (3M)18.09K

Price to Earnings (P/E)13.2

Beta (1Y)0.78

Revenue Growth7.24%

EPS Growth-9.51%

CountryUS

Employees1,500

SectorConsumer Cyclical

Sector Strength60

IndustryFurnishings, Fixtures & Appliances

Share Statistics

EPS (TTM)1.13

Shares Outstanding5,273,253

10 Day Avg. Volume12,880

30 Day Avg. Volume18,090

Financial Highlights & Ratios

PEG Ratio-0.41

Price to Book (P/B)1.04

Price to Sales (P/S)0.00

P/FCF Ratio6.40

Enterprise Value/Market Cap1.15

Enterprise Value/Revenue0.12

Enterprise Value/Gross Profit2.16

Enterprise Value/Ebitda2.06

Forecast

1Y Price Target

$54.00

Price Target Upside61.15% Upside

Rating ConsensusHold

Number of Analyst Covering1

Flexsteel Business Overview & Revenue Model

Company DescriptionFlexsteel Industries, Inc. (FLXS) is a prominent furniture manufacturer based in the United States, primarily engaged in the design and production of residential and commercial upholstered and wooden furniture. The company's product portfolio includes a wide range of seating products, home office furniture, bedroom sets, dining room furniture, and occasional tables, catering to both the retail and contract markets.

How the Company Makes MoneyFlexsteel generates revenue through the sale of its diverse array of furniture products to both retailers and direct consumers. The company's primary revenue streams include the wholesale distribution of furniture to furniture retailers, online sales through its e-commerce platform, and direct sales to commercial clients such as hospitality businesses and government entities. Flexsteel's earnings are significantly influenced by its extensive distribution network, strategic partnerships with retailers, and its ability to adapt to consumer preferences and market trends. Additionally, Flexsteel invests in innovation and quality craftsmanship, which helps maintain its competitive edge in the furniture industry.

Flexsteel Financial Statement Overview

Summary

Flexsteel demonstrates a strong financial position with consistent revenue growth, a sound balance sheet free of debt, and effective cash management. While profitability margins suggest room for improvement, the company's solid equity base and cash generation capability provide a stable foundation for future growth.

Income Statement

Positive

Flexsteel's TTM (Trailing-Twelve-Months) income statement exhibits solid profitability with a gross profit margin of 21.5% and a net profit margin of 3.3%. The company has shown a commendable revenue growth rate of 5.9% from the previous year, indicating a positive sales trajectory. However, the EBITDA margin of 4.6% suggests room for improvement in operational efficiency.

Balance Sheet

Very Positive

The balance sheet is robust, with a debt-free position enhancing financial stability. The equity ratio stands at 100%, reflecting a strong capital structure. The return on equity at 5.4% is respectable but indicates potential for greater profitability.

Cash Flow

Very Positive

Cash flow analysis shows Flexsteel's healthy cash generation capability. The operating cash flow to net income ratio is 2.0, indicating efficient earnings conversion. Free cash flow to net income ratio is a strong 1.8, showcasing effective cash retention. However, there's a slight decline in free cash flow growth of -4.9% year-over-year.

TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Breakdown
Income Statement		Total Revenue
437.28M	412.75M	393.69M	544.28M	478.93M	366.93M
	Gross Profit
94.08M	87.24M	70.95M	72.68M	96.73M	53.05M
	EBIT
17.33M	17.08M	10.54M	6.62M	31.20M	-19.39M
	EBITDA
21.30M	21.10M	12.33M	11.12M	34.01M	-25.30M
	Net Income Common Stockholders
14.37M	10.53M	14.78M	1.85M	23.05M	-26.84M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
4.57M	4.76M	3.37M	2.18M	1.34M	48.20M
	Total Assets
273.77M	274.46M	290.55M	268.74M	296.78M	237.26M
	Total Debt
81.69M	70.42M	28.27M	44.10M	33.65M	12.02M
	Net Debt
77.12M	65.65M	24.91M	41.92M	32.31M	-36.18M
	Total Liabilities
128.50M	124.09M	148.93M	137.18M	128.81M	61.75M
	Stockholders Equity
145.26M	150.37M	141.62M	131.56M	167.97M	175.50M
Cash Flow		Free Cash Flow
25.77M	27.11M	18.20M	4.14M	-35.27M	14.60M
	Operating Cash Flow
28.88M	31.88M	22.99M	7.99M	-32.69M	18.29M
	Investing Cash Flow
9.77M	-593.00K	-4.45M	-1.92M	16.06M	16.79M
	Financing Cash Flow
-20.58M	-29.89M	-17.36M	-5.24M	-30.23M	-9.12M

Flexsteel Technical Analysis

Technical Analysis Sentiment

Negative

Last Price33.51

Price Trends

50DMA

36.20

Negative

100DMA

44.30

Negative

200DMA

45.50

Negative

Market Momentum

MACD

-1.42

Negative

RSI

39.52

Neutral

STOCH

26.71

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FLXS, the sentiment is Negative. The current price of 33.51 is above the 20-day moving average (MA) of 32.81, below the 50-day MA of 36.20, and below the 200-day MA of 45.50, indicating a bearish trend. The MACD of -1.42 indicates Negative momentum. The RSI at 39.52 is Neutral, neither overbought nor oversold. The STOCH value of 26.71 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FLXS.

Flexsteel Risk Analysis

Flexsteel disclosed 15 risk factors in its most recent earnings report. Flexsteel reported the most risks in the “Production” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Flexsteel Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ETD	73 Outperform	$698.31M	12.17	12.09%	5.98%	-6.32%	-18.35%
LZB	72 Outperform	$1.80B	14.94	12.40%	2.00%	1.81%	8.09%
FLXS	71 Outperform	$176.71M	13.19	9.48%	2.11%	7.24%	-9.51%
Sector *	61 Neutral	$6.92B	11.84	3.00%	3.95%	2.60%	-21.94%
BSET	56 Neutral	$150.76M	―	-3.83%	4.43%	-11.78%	-13.89%
MLKN	52 Neutral	$1.21B	42.05	2.28%	4.47%	-2.68%	-56.16%
HOFT	48 Neutral	$110.45M	―	-5.89%	9.96%	-8.26%	-233.72%

* Consumer Cyclical Sector Average

Performance Comparison

FLXS

Flexsteel

33.59

0.09

0.27%

BSET

Bassett Furniture

17.37

4.09

30.80%

ETD

Ethan Allen

27.48

-0.90

-3.17%

MLKN

MillerKnoll

17.83

-9.22

-34.09%

HOFT

Hooker Furniture

10.32

-7.15

-40.93%

LZB

La-Z-Boy Incorporated

43.61

8.43

23.96%

Flexsteel Earnings Call Summary

Earnings Call Date:Apr 21, 2025

(Q3-2025)

% Change Since: 4.92%|

Next Earnings Date:Aug 25, 2025

Earnings Call Sentiment Neutral

Flexsteel Industries demonstrated strong sales growth and profitability improvements, supported by new product introductions and effective cash management. However, the company faces significant challenges from potential tariff impacts, demand volatility, and broader economic uncertainties that could affect future performance.

Q3-2025 Updates

Positive Updates

Consistent Sales Growth

Flexsteel Industries reported sales growth of 6.3% compared to the prior year quarter, marking the sixth consecutive quarter of year-over-year growth.

Profitability Improvement

Adjusted operating margin improved to 7.3%, representing the eighth consecutive quarter of year-over-year improvement and the second highest quarterly adjusted operating margin over the past seven years.

Strong Cash Generation

Flexsteel generated $12.3 million in operating cash flow during the quarter and increased their ending cash balance to $22.6 million.

New Product Introductions

The company launched 25 new product groups and emphasized continuous innovation and expanded market presence, contributing significantly to their sales.

Negative Updates

Tariff Challenges

Flexsteel faces potential impacts from a proposed 46% reciprocal tariff rate on goods from Vietnam, which could affect margins and supply chain operations.

Demand Volatility

Following tariff announcements, the company observed a significant slowdown in orders and some cancellations, indicating uncertainty in consumer demand.

Non-Cash Impairment Charge

The company recorded a $14.1 million non-cash impairment charge related to an unoccupied leased facility in Mexicali, Mexico.

Economic Uncertainty

There's substantial uncertainty due to trade relations and the potential for a recession, which could impact consumer spending and the furniture industry.

Company Guidance

During Flexsteel Industries' third quarter fiscal year 2025 earnings call, the company reported several key metrics and guidance. Flexsteel achieved a sales growth of 6.3% compared to the prior year, marking their sixth consecutive quarter of year-over-year growth. The adjusted operating margin reached 7.3%, which is the second highest quarterly margin in the past seven years. Operating cash flow was $12.3 million, with an ending cash balance of $22.6 million. The company also highlighted a strong order backlog of $78.3 million entering the fourth quarter. For the fourth quarter, Flexsteel anticipates sales between $109 and $116 million, with an operating margin forecasted to range from 6.0% to 7.3%. However, the company expressed concerns over potential impacts from proposed US reciprocal tariffs, particularly a 10% tariff on Vietnam imports, which could affect consumer demand and margins. Despite these external challenges, Flexsteel remains optimistic about its financial strength and strategic initiatives to drive long-term growth.

Flexsteel Corporate Events

Business Operations and StrategyFinancial Disclosures

Flexsteel Reports Strong Q3 2025 Results Amid Challenges

Positive

Apr 21, 2025

Flexsteel Industries, Inc. reported strong fiscal third quarter 2025 results with net sales of $114.0 million, marking a 6.3% increase from the prior year, despite a GAAP operating loss due to a $14.1 million impairment charge related to its Mexicali, Mexico facility. The company achieved an adjusted operating income of $8.3 million and generated $12.3 million in cash from operations, bolstering its cash position to $22.6 million. Despite economic uncertainties and potential impacts from U.S. trade policy changes, Flexsteel remains focused on executing growth strategies and maintaining supply chain agility to navigate the challenging environment.

Spark’s Take on FLXS Stock

According to Spark, TipRanks’ AI Analyst, FLXS is a Neutral.

Flexsteel shows robust financial performance with strong revenue growth and a debt-free position, supporting a stable outlook. However, technical indicators suggest bearish momentum, warranting caution. The stock’s valuation is appealing, and recent earnings call insights provide a positive sentiment despite potential tariff risks.

To see Spark’s full report on FLXS stock, click here.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.