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Aterian, Inc. (ATER)
:ATER
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Aterian
(NASDAQ:ATER)
49Neutral
Positive Factors
Financial Performance
ATER reached EBITDA breakeven a quarter ahead of plan.
Product Expansion
Plans to expand its omnichannel footprint hold promise with ATER poised to launch on Target's Target Plus marketplace and other brick & mortar stores possible.
Negative Factors
Consumer Environment
The general consumer environment looks uncertain as inflation could re-emerge and interest rates could be stickier than anticipated.
Market Competition
The consumer environment is still difficult and the Amazon Marketplace is highly competitive.
Tariffs and Sourcing
Higher tariffs look highly likely and ATER sources the large majority of its product from China.
Aterian (ATER) vs. S&P 500 (SPY)
Market Cap
$16.45M
Dividend YieldN/A
Average Volume (3M)109.27K
Price to Earnings (P/E)―
Beta (1Y)1.13
Revenue Growth-30.53%
EPS Growth85.21%
CountryUS
Employees97
SectorConsumer Cyclical
Sector Strength57
IndustryFurnishings, Fixtures & Appliances
Share Statistics
EPS (TTM)-0.18
Shares Outstanding8,750,741
10 Day Avg. Volume55,846
30 Day Avg. Volume109,267
Financial Highlights & Ratios
PEG RatioN/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 Ratio0.00
Enterprise Value/Market Cap0.37
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit0.10
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$4.00Price Target Upside100.00% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Aterian Business Overview & Revenue Model
Company DescriptionAterian, Inc. (ATER) is a technology-enabled consumer products company that leverages proprietary software and data analytics to streamline the process of designing, manufacturing, marketing, and selling products online. The company primarily operates in the e-commerce sector, offering a diverse range of consumer goods across various categories such as home and kitchen, health and wellness, and beauty and personal care. Aterian utilizes a platform-based approach to identify market opportunities and rapidly bring high-demand products to market through online channels, particularly on Amazon and other e-commerce platforms.
How the Company Makes MoneyAterian generates revenue through the sale of consumer products across multiple online retail platforms, with a significant portion of its sales occurring on Amazon. The company employs a data-driven model to identify trending products and optimize their production and marketing strategies, which allows them to efficiently capture market demand. Aterian's key revenue streams include direct sales of its branded products, as well as strategic partnerships and collaborations that enhance its product offerings. Additionally, the company benefits from economies of scale and operational efficiencies afforded by its proprietary technology platform, which enhances its profitability by reducing costs and improving product margins.
Aterian Financial Statement Overview
Summary
Aterian faces profitability challenges with persistent net losses and declining revenues, despite a strong gross profit margin. The balance sheet shows moderate debt levels and positive equity, but negative return on equity highlights inefficiencies. Cash flow shows recent improvement, but underlying operational inefficiencies remain a concern.Income Statement
The company has faced declining revenues over recent years, with a significant drop from 2019 to 2024. Gross profit margin stands at 62.0% for 2024, indicating a strong ability to convert revenue into gross profit, yet the net profit margin is deeply negative at -12.0%, reflecting continued net losses. EBIT and EBITDA margins are also negative, suggesting operating challenges. Overall, profitability remains a significant concern.―
Balance Sheet
Aterian's balance sheet shows a manageable debt-to-equity ratio of 0.25 in 2024, indicating a moderate level of debt relative to equity. Stockholders' equity has decreased from 2021, but the company maintains a positive equity ratio of 60.6%, suggesting reasonable financial stability. The return on equity is negative due to losses, pointing to inefficiencies in generating returns on shareholder investment.55
Cash Flow
The cash flow statement shows improvement with positive free cash flow of $2.12 million in 2024, a turnaround from negative flows in previous years. Operating cash flow is positive, yet the ratio of operating cash flow to net income indicates a challenge in converting earnings into cash. Free cash flow to net income is also negative, reflecting underlying profitability issues.―
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 99.05M | 142.57M | 221.17M | 247.77M | 185.70M | Gross Profit |
| 61.49M | 70.28M | 105.52M | 121.86M | 84.75M | EBIT |
| -11.82M | -76.19M | -59.87M | -59.14M | -22.02M | EBITDA |
| -10.13M | -69.42M | -186.45M | -214.92M | -57.49M | Net Income Common Stockholders |
| -11.86M | -74.56M | -196.29M | -234.72M | -63.13M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 18.00M | 20.02M | 43.57M | 30.32M | 26.72M | Total Assets |
| 49.54M | 61.87M | 156.44M | 312.09M | 157.45M | Total Debt |
| 7.41M | 12.15M | 22.75M | 40.42M | 86.50M | Net Debt |
| -10.58M | -7.88M | -20.83M | 10.11M | 59.79M | Total Liabilities |
| 19.52M | 25.84M | 54.49M | 86.56M | 134.07M | Stockholders Equity |
| 30.02M | 36.03M | 101.95M | 225.53M | 23.38M |
| Cash Flow | Free Cash Flow | |||
| 2.12M | -13.51M | -17.56M | -42.00M | 5.01M | Operating Cash Flow |
| 2.17M | -13.39M | -17.48M | -41.97M | 5.10M | Investing Cash Flow |
| -242.00K | -244.00K | -677.00K | -44.91M | -39.05M | Financing Cash Flow |
| -4.91M | -11.11M | 27.00M | 95.57M | 33.31M |
Aterian Technical Analysis
Negative
2.00
Price Trends
2.02
Negative
2.15
Negative
2.53
Negative
Market Momentum
-0.01
Negative
47.35
Neutral
61.38
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ATER, the sentiment is Negative. The current price of 2 is above the 20-day moving average (MA) of 1.82, below the 50-day MA of 2.02, and below the 200-day MA of 2.53, indicating a neutral trend. The MACD of -0.01 indicates Negative momentum. The RSI at 47.35 is Neutral, neither overbought nor oversold. The STOCH value of 61.38 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ATER.
Aterian Risk Analysis
Aterian disclosed 26 risk factors in its most recent earnings report. Aterian reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Aterian Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
61 Neutral | $6.58B | 11.77 | 3.05% | 3.99% | 2.61% | -21.52% | |
49 Neutral | $16.45M | ― | -35.92% | ― | -30.53% | 85.21% | |
47 Neutral | $71.61M | ― | -144.37% | ― | -5.48% | 17.33% | |
46 Neutral | $77.18M | ― | -112.92% | ― | -23.06% | 56.09% | |
42 Neutral | $44.06M | ― | -25.01% | ― | -2.91% | 3.98% | |
42 Neutral | $14.00M | ― | -307.29% | ― | -12.63% | 61.30% | |
42 Neutral | $38.57M | ― | -298.04% | ― | 47.13% | -49.61% |
* Consumer Cyclical Sector Average
Performance Comparison
ATER
Aterian
1.88
-0.66
-25.98%
IRBT
iRobot
2.36
-6.66
-73.84%
NTZ
Natuzzi SPA
3.85
-1.80
-31.86%
PRPL
Purple Innovation
0.74
-0.94
-55.95%
NVFY
Nova Lifestyle
1.02
-1.25
-55.07%
NCL
Northann Corp.
0.40
-0.03
-6.98%
Aterian Earnings Call Summary
Earnings Call Date:Mar 18, 2025
(Q4-2024)
| % Change Since: -5.21%|
Next Earnings Date:May 14, 2025
Earnings Call Sentiment Neutral
Despite a significant decline in revenue, Aterian has made notable strides in improving EBITDA and gross margins. The strategic focus on product expansion, market diversification, and a share repurchase program portrays a positive outlook. However, tariff challenges and dependency on China remain significant concerns.Q4-2024 Updates
Positive Updates
Significant EBITDA Improvement
Adjusted EBITDA losses reduced by 91% from $22.3 million in 2023 to $2.1 million in 2024, demonstrating strong strategic execution.
Strong Gross Margin Growth
Gross margin for Q4 2024 increased to 63.4% from 51% in the previous year, attributed to SKU rationalization and improved product mix.
Product and Market Expansion Plans
Plans for 2025 include launching approximately five new product categories and expanding into new markets like the UK and new channels like Target Plus.
Share Repurchase Program
Board authorized a two-year share repurchase program of up to $3 million, indicating confidence in undervalued stock.
Negative Updates
Revenue Decline
Net revenue for Q4 2024 declined 25% to $24.6 million from $32.8 million in the year-ago quarter, primarily due to SKU rationalization.
Tariff Impact
New tariffs, including 20% on China-sourced imports, expected to impact cost of sales by $3.5 million in 2025, with plans to mitigate 50% through price increases.
Continued Dependency on China
Despite efforts to reduce dependency, 75% of net revenues are still sourced from China, with plans to reduce this by 50% by 2026.
Company Guidance
During the Aterian Inc. Fourth Quarter and Full Year 2024 Earnings Conference Call, the management team presented guidance for 2025, highlighting several key financial metrics. They anticipate a net revenue increase of 5% to 7% from the $99 million reported in 2024, with an adjusted performance basis increase of 9% to 12% after accounting for discontinued SKUs. The target for 2025 is to achieve essentially break-even adjusted EBITDA, improving from a $2.1 million loss in 2024. The guidance factors in a $3.5 million impact due to tariffs, with plans to mitigate approximately half of this through price adjustments. Additionally, the company expects to expand its market reach through channel and geographical expansions, introducing new products, and exploring further opportunities in brick-and-mortar and international markets.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.