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Why Liquidity Services Stock Skyrocketed Today

What happened

Shares of Liquidity Services (NASDAQ: LQDT) skyrocketed today, up by 17% as of 11:40 a.m. EST, after the company reported fiscal fourth-quarter earnings. The results topped expectations and the company issued a rosy forecast for next quarter.

So what

Revenue in the fiscal fourth quarter was $55.9 million, easily beating the consensus estimate of $53.5 million. That resulted in adjusted net income of $7.9 million, or $0.23 per share, while Wall Street analysts were looking for just $0.01 per share in adjusted profits. Liquidity Services, which operates a business-to-business (B2B) e-commerce technology platform, reported total gross merchandise volume (GMV) of $196.9 million and adjusted EBITDA of $9 million.

Image source: Getty Images.

"Our e-commerce marketplace capabilities continue to drive strong recovery for sellers and have enabled us to scale our services quickly as more customers seek more efficient self-serve solutions to manage surplus and returned goods in the supply chain," CEO Bill Angrick said in a statement. "In turn, our higher recovery rates have driven increasing adoption of our consignment pricing model, positively impacting gross profit margins."

Now what

Liquidity Services repurchased $4 million in stock during the quarter and finished the fiscal year with $76 million in cash and no debt.

In terms of guidance for the fiscal first quarter, GMV is forecast in the range of $175 million to $195 million, which should translate into adjusted EBITDA of $5 million to $6.5 million. Adjusted earnings per share are expected to be $0.08 to $0.12, which is better than the $0.01 per share in adjusted losses that analysts are modeling for.

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Evan Niu, CFA has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.


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