Announcement • Mar 28
Charles & Colvard, Ltd. Announces Board Changes Charles & Colvard, Ltd. announced Duc Pham, a member of the board of directors notified the Company of his intention to resign from the Board, which became effective on March 25, 2026. His resignation from the Board was not the result of any disagreement with the Company, the Board, or Company management on any matter relating to the Company’s operations, policies or practices. Mr. Pham was a member of the Audit Committee and was Chair of the Compensation Committee. In connection with the resignation of Mr. Pham, the size of the Board was subsequently decreased from four to three members. As previously reported, Michael Levin was appointed by the Board to serve as Executive Chair on January 5, 2026 for an initial term of three months. On March 25, 2026, the Board approved extending the term of Mr. Levin’s appointment for an additional one-month period (the “Extended Term”). Announcement • Mar 04
Charles & Colvard, Ltd. Filed for Bankruptcy Charles & Colvard, Ltd. filed a voluntary petition for reorganization under Chapter 11 in the US Bankruptcy Court for the Eastern District of North Carolina on March 2, 2026. The debtor listed its assets in the range of $1 million to $10 million and liabilities in the range of $1 million to $10 million. The debtor is represented by Rebecca Redwine Grow, Lydia C. Carpenter, Jason L. Hendren and Benjamin E.F.B. Waller of Hendren, Redwine & Malone, PLLC as its legal counsel. Announcement • Feb 18
Charles & Colvard, Ltd. announced delayed 10-Q filing On 02/17/2026, Charles & Colvard, Ltd. announced that they will be unable to file their next 10-Q by the deadline required by the SEC. Announcement • Jan 08
Charles & Colvard, Ltd. Announces Management Changes, Effective January 5, 2026 Charles & Colvard, Ltd. approved, effective as of January 5, 2026, the termination of Don O'Connell as President of the Company, without Cause (as defined under Mr. O'Connell's Employment Agreement). On January 5, 2026, the Board appointed Michael Levin, age 63, the current Board Chair, to serve as Executive Chair in order to oversee the affairs of the Company, lead the executive team, and conduct a search for a Chief Executive Officer for an initial term of three months. Mr. Levin has significant financial, accounting, investment, audit and marketing expertise derived from positions with private and public operating companies and investment companies. Announcement • Dec 06
Charles & Colvard, Ltd. Announces Resignation of Director Neal Goldman Charles & Colvard, Ltd. On November 26, 2025, the Company's board of directors accepted the resignation of Neal Goldman from the Board and withdrawal from consideration for re-election as a member of the Board, effective immediately. Mr. Goldman’s resignation was not due to any disagreement or matter relating to the Company’s operations, financials, policies, or practices. Announcement • Nov 18
Charles & Colvard, Ltd. announced delayed 10-Q filing On 11/17/2025, Charles & Colvard, Ltd. announced that they will be unable to file their next 10-Q by the deadline required by the SEC. Announcement • Oct 01
Charles & Colvard, Ltd. announced delayed annual 10-K filing On 09/30/2025, Charles & Colvard, Ltd. announced that they will be unable to file their next 10-K by the deadline required by the SEC. Announcement • Aug 18
Charles & Colvard, Ltd., Annual General Meeting, Oct 13, 2025 Charles & Colvard, Ltd., Annual General Meeting, Oct 13, 2025. Location: 170 southport drive, morrisville, north carolina,27560., United States Announcement • Jul 14
The Nasdaq Stock Market to Delist the Common Stock of Charles & Colvard The Nasdaq Stock Market announced that it will delist the common stock of Charles & Colvard Ltd. Charles & Colvard Ltd.’s stock was suspended on April 25, 2025, and has not traded on Nasdaq since that time. Announcement • May 17
Charles & Colvard, Ltd. announced delayed 10-Q filing On 05/16/2025, Charles & Colvard, Ltd. announced that they will be unable to file their next 10-Q by the deadline required by the SEC. Announcement • Apr 25
Charles & Colvard, Ltd.(OTCPK:CTHR) dropped from NASDAQ Composite Index Charles & Colvard, Ltd. has been dropped from the Nasdaq Composite Index Announcement • Apr 23
Charles & Colvard Announces Delisting from Nasdaq Charles & Colvard, Ltd. announced that the Company received a staff determination letter from the Nasdaq Stock Market, LLC (“Nasdaq”), informing the Company that Nasdaq determined to suspend trading and delist the Company’s common stock (the “Common Stock”) from Nasdaq because the Company is out of compliance with Listing Rule 5250(c)(1) for failure to timely file its Forms 10-Q for the quarters ended September 30 and December 31, 2024, unless the Company appeals this determination. The Company does not intend to request a hearing to appeal this determination. This decision was based on a careful review of numerous factors, including the potential for limiting the significant costs associated with remaining listed on Nasdaq and complying with Nasdaq listing standards. Nasdaq is expected to file a Form 25-NSE (Notification of Removal from Listing) with the Securities and Exchange Commission relating to the delisting of the Common Stock. Suspension of trading of the Common Stock will occur at the opening of business on April 25, 2025. Following the delisting, the Company expects that the Common Stock will be quoted on the OTC Experts Market. No assurances can be provided, however, that a trading market in the Common Stock in any over-the-counter market will be maintained. Announcement • Mar 04
Charles & Colvard Receives Expected Nasdaq Notice Regarding Delayed Form 10-Q Charles & Colvard, Ltd. announced that on February 25, 2025, it received an expected notice from the Listing Qualifications Department of the Nasdaq Stock Market LLC (‘Nasdaq’) stating that the Company continues to not be in compliance with Nasdaq Listing Rule 5250(c)(1) (the ‘Listing Rule’), as a result of not having timely filed its Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2024. Nasdaq previously accepted the Company’s plan to regain compliance with the Listing Rule and granted the Company until April 14, 2025 to file its Annual Report on Form 10-K for the fiscal year ended June 30, 2024 and Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2024. Nasdaq has informed the Company that it must submit an update to its original plan of compliance no later than March 12, 2025 and that any additional exception to allow the Company to regain compliance with all delinquent filings will be limited to April 14, 2025. The Notice has no immediate effect on the listing or trading of the Company’s common stock on Nasdaq. The Company is working diligently to complete its delinquent periodic reports as promptly as practicable and regain compliance with the Listing Rule. Announcement • Feb 19
Charles & Colvard, Ltd. announced delayed 10-Q filing On 02/18/2025, Charles & Colvard, Ltd. announced that they will be unable to file their next 10-Q by the deadline required by the SEC. Board Change • Feb 16
Insufficient new directors No new directors have joined the board in the last 3 years. The company's board is composed of: No new directors. 1 experienced director. 3 highly experienced directors. President, CEO & Director Don O'Connell was the last director to join the board, commencing their role in 2020. The company’s insufficient board refreshment is considered a risk according to the Simply Wall St Risk Model. Announcement • Jan 25
Charles & Colvard, Ltd. Announces the Resignation of Benedetta Casamento from the Board of Directors On January 20, 2025, Benedetta Casamento resigned from the Board of Directors of Charles & Colvard, Ltd. Her resignation from the Board was not the result of any disagreement with the Company on any matter relating to its operations, policies or practices. Announcement • Nov 28
Charles & Colvard, Ltd. Receives Non-Compliance Letter from Nasdaq On November 21, 2024, Charles & Colvard, Ltd. (the Company") received a notice (the Notice") from the Listing Qualifications Department of the Nasdaq Stock Market (Nasdaq") indicating that because the Company had not yet filed its Form 10-Q for the quarter ended September 30, 2024 (the Form 10-Q"), and because the Company remains delinquent in filing its Form 10-K for the fiscal year ended June 30, 2024 (the Form 10-K"), the Company was not in compliance with Nasdaq Listing Rule 5250(c)(1) (the Listing Rule") requiring Nasdaq-listed companies to timely file all periodic financial reports with the Securities and Exchange Commission (the SEC"). The Form 10-Q was due on November 14, 2024. The Company filed a Notification of Late Filing on Form 12b-25 with the SEC on November 15, 2024. The Notice states that the Company has until December 17, 2024, to regain compliance with the Listing Rule or to submit a plan to regain compliance with the Listing Rule (the Plan"). If Nasdaq accepts the Company's Plan to regain compliance, then Nasdaq may grant the Company up to 180 calendar days from the Form 10-K filing due date, or until April 14, 2025, to file its Form 10-K and Form 10-Q to regain compliance. If Nasdaq does not accept the Company's Plan, then the Company will have the opportunity to appeal that decision to a Nasdaq Hearings Panel. The Notice has no immediate effect on the listing or trading of the Company's common stock on Nasdaq. The Company is working diligently to complete its Form 10-K and Form 10-Q and plans to file its Form 10-K and Form 10-Q as promptly as practicable to regain compliance with the Listing Rule. Announcement • Nov 16
Charles & Colvard, Ltd. announced delayed 10-Q filing On 11/15/2024, Charles & Colvard, Ltd. announced that they will be unable to file their next 10-Q by the deadline required by the SEC. Announcement • Oct 25
Charles & Colvard Receives Non-Compliance Letter from Nasdaq Regarding Non-Compliance with Nasdaq Listing Rule 5250(c)(1) Charles & Colvard, Ltd. (‘Charles & Colvard’ or the ‘Company’) announced that on October 18, 2024, it received a letter from the Listing Qualifications Department of the Nasdaq Stock Market LLC (‘Nasdaq’) notifying the Company that it was not in compliance with Nasdaq Listing Rule 5250(c)(1), which requires the timely filing of all required periodic reports (the ‘Listing Rule’), as a result of not having timely filed its Annual Report on Form 10-K for the fiscal year ended June 30, 2024 (the ‘Form 10-K’), with the Securities and Exchange Commission (the ‘SEC’). The Form 10-K was due on September 30, 2024. The Company filed a Notification of Late Filing on Form 12b-25 with the SEC on October 1, 2024. The Notice has no immediate effect on the listing or trading of the Company's common stock on Nasdaq. Under Nasdaq rules, the Company has 60 calendar days, or until December 17, 2024, to regain compliance with the Listing Rule or to submit to Nasdaq a plan to regain compliance with the Listing Rule (the ‘Plan’). If Nasdaq accepts the Company's Plan, then Nasdaq may grant the Company up to 180 calendar days from the Form 10-K filing due date, or until April 14, 2025 to regain compliance. If Nasdaq does not accept the Company's Plan, then the Company will have the opportunity to appeal that decision to a Nasdaq Hearings Panel. The Company is working diligently to complete its Form 10-K and plans to file its Form 10-K as promptly as practicable to regain compliance with the Listing Rule. Announcement • Oct 02
Charles & Colvard, Ltd. announced delayed annual 10-K filing On 10/01/2024, Charles & Colvard, Ltd. announced that they will be unable to file their next 10-K by the deadline required by the SEC. New Risk • Sep 21
New minor risk - Share price stability The company's share price has been volatile over the past 3 months. It is more volatile than 75% of American stocks, typically moving 10% a week. This is considered a minor risk. Share price volatility indicates the stock is highly sensitive to market conditions or economic conditions rather than being sensitive to its own business performance, which may also be inconsistent. It also increases the risk of potential losses in the short term as the stock tends to have larger drops in price more frequently than other stocks. Currently, the following risks have been identified for the company: Major Risks Less than 1 year of cash runway based on free cash flow trend (-US$7.2m free cash flow). Earnings have declined by 44% per year over the past 5 years. Market cap is less than US$10m (US$6.25m market cap). Minor Risk Share price has been volatile over the past 3 months (10% average weekly change). Announcement • May 16
Charles & Colvard Approves 1-for-10 Reverse Split to Bring it into Compliance with Nasdaq's Minimum Bid Price Requirement for Continued Listing Charles & Colvard, Ltd. (the ‘Company’) announced that the company's board of directors has approved a one-for-ten (1:10) reverse split of the Company's common stock, no par value per share (the ‘Reverse Stock Split’), to be effective as of 12:01 a.m. Eastern Time on May 17, 2024 (the ‘Effective Date’). The Reverse Stock Split is intended to bring the Company into compliance with Nasdaq's $1.00 per share minimum bid price requirement for continued listing. The Company expects its common stock to begin trading on a split-adjusted basis on the Nasdaq Capital Market as of the commencement of trading on May 17, 2024 with a new CUSIP number of 159765205. The ticker symbol for the Company stock will remain ‘CTHR.’ The Company's shareholders at a special meeting held on May 7, 2024, approved a proposal to amend the Company's Restated Articles of Incorporation to effect a Reverse Stock Split at a ratio within a range from any whole number between one-for-ten to one-for-fifteen, as determined by the Board of Directors in its sole discretion. Reported Earnings • May 03
Third quarter 2024 earnings released: US$0.12 loss per share (vs US$0.28 loss in 3Q 2023) Third quarter 2024 results: US$0.12 loss per share (improved from US$0.28 loss in 3Q 2023). Revenue: US$5.26m (down 21% from 3Q 2023). Net loss: US$3.63m (loss narrowed 57% from 3Q 2023). Over the last 3 years on average, the company's share price growth rate has exceeded its earnings growth rate by 61 percentage points per year, which is a significant difference in performance. Announcement • Apr 24
Charles & Colvard, Ltd. to Report Q3, 2024 Results on May 02, 2024 Charles & Colvard, Ltd. announced that they will report Q3, 2024 results After-Market on May 02, 2024 New Risk • Apr 18
New minor risk - Share price stability The company's share price has been volatile over the past 3 months. It is more volatile than 75% of American stocks, typically moving 10% a week. This is considered a minor risk. Share price volatility indicates the stock is highly sensitive to market conditions or economic conditions rather than being sensitive to its own business performance, which may also be inconsistent. It also increases the risk of potential losses in the short term as the stock tends to have larger drops in price more frequently than other stocks. Currently, the following risks have been identified for the company: Major Risks Less than 1 year of cash runway based on free cash flow trend (-US$5.9m free cash flow). Earnings have declined by 39% per year over the past 5 years. Minor Risks Share price has been volatile over the past 3 months (10% average weekly change). Market cap is less than US$100m (US$10.5m market cap). New Risk • Apr 04
New major risk - Market cap size The company's market capitalization is less than US$10m. Market cap: US$9.95m This is considered a major risk. Companies with a small market capitalization are most likely businesses that have not yet released a product to market or are simply a very small company without a wide reach. Either way, risk is elevated with these companies because there is a chance the product may not come to fruition or the company's addressable market or demand may not be as large as expected. In addition, if the company's size is the main factor, it is less likely to have many investors and analysts following it and scrutinizing its performance and outlook. Currently, the following risks have been identified for the company: Major Risks Less than 1 year of cash runway based on free cash flow trend (-US$5.9m free cash flow). Earnings have declined by 39% per year over the past 5 years. Market cap is less than US$10m (US$9.95m market cap). Reported Earnings • Feb 14
Second quarter 2024 earnings released: US$0.094 loss per share (vs US$0.034 loss in 2Q 2023) Second quarter 2024 results: US$0.094 loss per share (further deteriorated from US$0.034 loss in 2Q 2023). Revenue: US$7.91m (down 24% from 2Q 2023). Net loss: US$2.87m (loss widened 175% from 2Q 2023). Over the last 3 years on average, the company's share price growth rate has exceeded its earnings growth rate by 55 percentage points per year, which is a significant difference in performance. Announcement • Feb 07
Charles & Colvard, Ltd. to Report Q2, 2024 Results on Feb 13, 2024 Charles & Colvard, Ltd. announced that they will report Q2, 2024 results After-Market on Feb 13, 2024 Board Change • Dec 28
Insufficient new directors No new directors have joined the board in the last 3 years. The company's board is composed of: No new directors. 2 experienced directors. 3 highly experienced directors. President, CEO & Director Don O'Connell was the last director to join the board, commencing their role in 2020. The company’s insufficient board refreshment is considered a risk according to the Simply Wall St Risk Model. Announcement • Dec 15
Charles & Colvard Receives Notification Letter from Nasdaq Regarding Eligible for an Additional 180-Day Grace Period, or Until June 10, 2024 to Regain Compliance with the Minimum Bid Price Requirement As previously disclosed, on June 12, 2023, Charles & Colvard, Ltd. (the ‘Company’) received a notification letter from Nasdaq’s Listing Qualifications Department indicating that the Company was not in compliance with Nasdaq Listing Rule 5550(a)(2) because the minimum bid price of its common stock on the Nasdaq Capital Market had closed below $1.00 per share for 30 consecutive business days (the ‘Minimum Bid Price Requirement’). In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company had 180 calendar days, or until December 11, 2023, to regain compliance with the Minimum Bid Price Requirement. On December 12, 2023 the Company received a notification letter from Nasdaq’s Listing Qualifications Department indicating that, while the Company has not regained compliance with the Minimum Bid Price Requirement, it is eligible for an additional 180-day grace period, or until June 10, 2024, to regain compliance with the Minimum Bid Price Requirement (the ‘December Notice’). To regain compliance, any time before June 10, 2024, the bid price of the Company’s common stock must close at a $1.00 per share or more for a minimum of 10 consecutive business days. Nasdaq’s determination to grant an additional 180-day grace period is based on the Company meeting the continued listing requirement for market value of publicly held shares and all other applicable requirements for initial listing on the Nasdaq Capital Market, with the exception of the Minimum Bid Price Requirement, and on the Company’s written notice to Nasdaq on December 11, 2023 of its intention to cure the deficiency during the additional 180 calendar day compliance period, which compliance could be achieved by effecting a reverse stock split, if necessary. If the Company does not regain compliance by June 10, 2024, the Company expects that Nasdaq will provide written notification that the Company’s common stock will be delisted. At that time, the Company may appeal Nasdaq’s delisting determination to a Nasdaq hearing panel. The December Notice has no effect on the listing or trading of the Company’s common stock at this time. The Company intends to actively monitor the bid price of its common stock and will consider available options to regain compliance with the listing requirements. There can be no assurance that the Company will be able to regain compliance with the Minimum Bid Price Requirement. Announcement • Nov 01
Charles & Colvard, Ltd. to Report Q1, 2024 Results on Nov 09, 2023 Charles & Colvard, Ltd. announced that they will report Q1, 2024 results at 4:00 PM, US Eastern Standard Time on Nov 09, 2023 Announcement • Oct 28
Charles & Colvard, Ltd., Annual General Meeting, Dec 14, 2023 Charles & Colvard, Ltd., Annual General Meeting, Dec 14, 2023, at 10:00 US Eastern Standard Time. Location: 170 Southport Drive, Morrisville, Morrisville North Carolina United States Agenda: To consider elect five nominees described in the proxy statement to the Board of Directors; to consider ratify the appointment of BDO USA, P.C. as independent registered public accounting firm for the fiscal year ending June 30, 2024; to consider vote, on an advisory (nonbinding) basis, to approve executive compensation; and to consider transact such other business as may properly come before the meeting or any adjournment thereof. Announcement • Oct 11
Charles & Colvard, Ltd. to Report Q4, 2023 Results on Oct 12, 2023 Charles & Colvard, Ltd. announced that they will report Q4, 2023 results at 4:00 PM, US Eastern Standard Time on Oct 12, 2023 Announcement • Oct 01
Charles & Colvard, Ltd. Provides Earnings Guidance for the Fiscal Year Ended June 30, 2023 Charles & Colvard, Ltd. provided earnings guidance for the fiscal year ended June 30, 2023. Consistent with the Company’s results for the first, second and third quarters of the fiscal year ended June 30, 2023, the Company expects to report net sales decreased by 31% to $29.9 million for the fiscal year ended June 30, 2023 compared to net sales of $43.1 million for the fiscal year ended June 30, 2022. Consistent with the Company’s results for the first, second and third quarters of the fiscal year ended June 30, 2023, the Company will report a net loss for the fiscal year ended June 30, 2023 that is a significant change compared to net income of $2.4 million reported for the year ended June 30, 2022. Board Change • Jul 01
Insufficient new directors No new directors have joined the board in the last 3 years. The company's board is composed of: No new directors. 2 experienced directors. 3 highly experienced directors. President, CEO & Director Don O'Connell was the last director to join the board, commencing their role in 2020. The company’s insufficient board refreshment is considered a risk according to the Simply Wall St Risk Model. Announcement • Jun 16
Charles & Colvard Receives Notification Letter from Nasdaq’s Listing Qualifications Department Indicating that the Company Is Not in Compliance with Nasdaq Listing Rule 5550(a)(2) On June 12, 2023, Charles & Colvard, Ltd. received a notification letter from Nasdaq’s Listing Qualifications Department indicating that the Company is not in compliance with Nasdaq Listing Rule 5550(a)(2) because the minimum bid price of its common stock on the Nasdaq Capital Market has closed below $1.00 per share for 30 consecutive business days. The notification letter has no immediate effect on the Nasdaq listing or trading in the Company’s common stock. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has 180 calendar days, or until December 11, 2023, to regain compliance with the minimum $1.00 bid price per share requirement. To regain compliance, any time before December 11, 2023, the bid price of the Company’s common stock must close at $1.00 per share or more for a minimum of 10 consecutive business days. On December 11, 2023, if the Company meets the continued listing requirement for market value of publicly held shares and all other initial listing standards for The Nasdaq Capital Market (except for the minimum bid price requirement), and the Company notifies Nasdaq of its intention to cure the deficiency, the Company may be provided with an additional 180 calendar day compliance period to regain compliance. If the Company is not eligible for an additional compliance period at that time, Nasdaq will provide the Company with written notification that its common stock will be subject to delisting. Upon such notice, the Company may appeal Nasdaq’s delisting determination to a Nasdaq hearing panel. There can be no assurance that, if the Company appeals Nasdaq’s determination, such appeal would be successful. The Company intends to actively monitor the bid price of its common stock and will consider available options to regain compliance with the listing requirements. Recent Insider Transactions • May 11
Insider recently bought US$204k worth of stock On the 5th of May, Carlos Valadez bought around 215k shares on-market at roughly US$0.95 per share. This transaction amounted to 14% of their direct individual holding at the time of the trade. In the last 3 months, they made an even bigger purchase worth US$1.6m. Insiders have collectively bought US$2.0m more in shares than they have sold in the last 12 months. Reported Earnings • May 07
Third quarter 2023 earnings released: US$0.28 loss per share (vs US$0.011 profit in 3Q 2022) Third quarter 2023 results: US$0.28 loss per share (down from US$0.011 profit in 3Q 2022). Revenue: US$6.64m (down 32% from 3Q 2022). Net loss: US$8.40m (down US$8.73m from profit in 3Q 2022). Over the last 3 years on average, earnings per share has increased by 17% per year but the company’s share price has only increased by 12% per year, which means it is significantly lagging earnings growth. Recent Insider Transactions • Apr 13
Insider recently bought US$1.6m worth of stock On the 6th of April, Carlos Valadez bought around 2m shares on-market at roughly US$1.03 per share. This trade did not impact their existing holding. This was the largest purchase by an insider in the last 3 months. Insiders have collectively bought US$1.7m more in shares than they have sold in the last 12 months. Reported Earnings • Feb 05
Second quarter 2023 earnings: EPS and revenues miss analyst expectations Second quarter 2023 results: US$0.034 loss per share (down from US$0.039 profit in 2Q 2022). Revenue: US$10.4m (down 25% from 2Q 2022). Net loss: US$1.04m (down 189% from profit in 2Q 2022). Revenue missed analyst estimates by 5.8%. Earnings per share (EPS) also missed analyst estimates by 200%. Revenue is forecast to grow 4.4% p.a. on average during the next 2 years, compared to a 8.1% growth forecast for the Luxury industry in the US. Over the last 3 years on average, earnings per share has increased by 47% per year but the company’s share price has fallen by 6% per year, which means it is significantly lagging earnings. Announcement • Jan 20
Charles & Colvard, Ltd. to Report Q2, 2023 Results on Feb 02, 2023 Charles & Colvard, Ltd. announced that they will report Q2, 2023 results at 4:00 PM, US Eastern Standard Time on Feb 02, 2023 Major Estimate Revision • Nov 16
Consensus EPS estimates fall by 200% The consensus outlook for earnings per share (EPS) in 2023 has deteriorated. 2023 revenue forecast decreased from US$36.3m to US$35.1m. Losses expected to increase from US$0.03 per share to US$0.09. Luxury industry in the US expected to see average net income decline 5.2% next year. Consensus price target down from US$1.75 to US$1.10. Share price rose 5.4% to US$0.97 over the past week. Major Estimate Revision • Nov 11
Consensus EPS estimates fall by 200% The consensus outlook for earnings per share (EPS) in 2023 has deteriorated. 2023 revenue forecast decreased from US$36.3m to US$35.1m. Losses expected to increase from US$0.03 per share to US$0.09. Luxury industry in the US expected to see average net income decline 7.2% next year. Consensus price target down from US$1.75 to US$1.10. Share price fell 6.9% to US$0.95 over the past week. Reported Earnings • Nov 05
First quarter 2023 earnings released: US$0.029 loss per share (vs US$0.028 profit in 1Q 2022) First quarter 2023 results: US$0.029 loss per share (down from US$0.028 profit in 1Q 2022). Revenue: US$7.37m (down 28% from 1Q 2022). Net loss: US$890.2k (down 208% from profit in 1Q 2022). Revenue is forecast to stay flat during the next 2 years compared to a 8.7% growth forecast for the Luxury industry in the US. Over the last 3 years on average, earnings per share has increased by 55% per year but the company’s share price has fallen by 14% per year, which means it is significantly lagging earnings. Seeking Alpha • Oct 03
Charles & Colvard: Lab Grown Diamonds Can Survive A Recession Summary
Charles & Colvard is capturing growing demand for lab-made diamonds and gemstones.
While the company is profitable with overall solid fundamentals, shares have been under pressure amid broader macro headwinds.
The stock looks interesting on the selloff considering what remains a positive long-term outlook.
Charles & Colvard (CTHR) specializes in lab-grown diamonds and moissanite fine jewelry. The "made, not mined" gemstones have gained popularity in recent years as a more affordable alternative to natural diamonds. Indeed, the company has benefited from this trend driving record sales and eight consecutive quarters of profitability. That being said, the trading action in the stock has been terrible with shares losing two-thirds of their value over the past year.
The challenge here considers a reset of expectations compared to some exuberance at the highs in 2021 into the more challenging economic environment and broader market volatility. Recognizing the ongoing macro headwinds, we like the stock which is supported by overall solid fundamentals and a positive long-term outlook.
CTHR Key Metrics
The company last reported its fiscal Q4 earnings in early September with a net income of $41k or EPS of $0.00, which was $0.01 ahead of the consensus. Revenue of $9.3 million was also ahead of estimates although 4% lower than the period last year in the context of a particularly strong quarter for consumer spending in 2021. This impact also resulted in a lower gross margin this quarter at 41% compared to 47% in Q4 fiscal 2021.
The full-year trends painted a more favorable picture with 2022 sales reaching $43.2 million, up 10% over 2021, and also 48% higher over 2020. The full-year gross profit of $20.2 million was also up from $18.4 million in 2021.
source: company IR
There are two sides to the business across the "Online Channels Segment", which includes the company-run website, along with the "Traditional Segment" that captures the wholesale business into brick-and-mortar retailers. In this case, the online business has been stronger with 3% y/y sales growth in Q4 while the traditional segment posted a 14% decline.
Within those amounts, management explains that the top line decline is largely related to weakness in "loose jewel" sales which fell by 22% y/y in Q4 reflecting lower demand for the category worldwide as a broader industry trend.
The company intends to focus more on finished jewelry going forward which has been able to sustain momentum with sales up 9% y/y. Ultimately this effort should support higher margins as finished goods add value compared to more commoditized loose diamonds.
source: company IR
The other strong point here is the balance sheet position. Charles & Colvard ended the quarter with $21.2 million in cash and restricted cash against zero long-term debt. In May the company announced a $5 million stock buyback program effect over the next three years. Assuming repurchases of around $1.6 million per year, the implied shareholder yield is 5.5%.
While the company is not providing forward financial guidance, management projected optimism for continued operating momentum during the earnings conference call.
CTHR Stock Price Forecast
One of the most positive factors in its outlook is the data suggesting the market adoption of lab-grown diamonds is climbing. According to the independent industry group, International Gem Society ((IGS)), lab diamond’s market share of total diamond sales in the U.S. climbed from around 3% in 2020 to 7% by Q1 of this year. Charles & Colvard expects that figure to reach 12% by 2025.
A large part of the growth is coming from the millennial age group between 25 and 44 that have embraced the technology. There is a sense that this group along with younger Gen Z buyers, which together currently represent 59% of total Charles & Colvard customers can support further growth opportunities. The company's strategy is to reach new customers across various channels including through social media while also partnering with major retailers and fine jewelry store networks for distribution.
source: company IR
All that said, the concern right now explaining much of the weakness in the stock comes down to the economic environment defined by high inflation and rising interest rates. Naturally, an outlook for slowing consumer spending and higher unemployment should pressure demand for discretionary items including fine jewelry.
The other dynamic at play is an understanding that the market for "lab-grown diamonds" and moissanite is competitive with larger peers. 2021 IPO Brilliant Earth Group Inc (BRLT) has a current market share of around 20x larger than CTHR while generating 10x more sales in the past year. There are also several other private-owned players like "Clean Origin" that offer similar types of products with a focus on the socially-conscious and environmentally friendly aspect of made gems.
In other words, the market is contested, and CTHR's weaker growth in 2022 compared to BRLT explains some of the poor sentiment towards the stock. Still, the argument we have is that the demand for lab grown diamonds has room for multiple players. The attraction of CTHR is its brand recognition and history, particularly with moissanite jewelry. The push towards more direct-to-consumer initiatives while the stock presents relative value.
We mentioned CTHR being undervalued and even "cheap" trading at a 12x P/E representing a large discount to BRLT at 26x. The large cash position on the CTHR balance sheet also leads to a current price to book value for the stock at 0.5x, a fraction of BRLT at 7x, which in our view, makes it too cheap to ignore. Major Estimate Revision • Sep 15
Consensus EPS estimates have been downgraded. The consensus outlook for earnings per share (EPS) in 2023 has deteriorated. 2023 revenue forecast decreased from US$38.9m to US$36.3m. Now expected to report a loss of US$0.03 per share instead of US$0.01 per share profit previously forecast. Luxury industry in the US expected to see average net income decline 1.1% next year. Consensus price target down from US$2.00 to US$1.75. Share price fell 3.5% to US$1.09 over the past week. Recent Insider Transactions Derivative • Sep 09
President exercised options and sold US$53k worth of stock On the 5th of September, Don O'Connell exercised options to acquire 39k shares at no cost and sold these for an average price of US$1.35 per share. This trade did not impact their existing holding. For the year to December 2017, Don's total compensation was 75% salary and 25% non-salary. Since September 2021, Don's direct individual holding has increased from 465.49k shares to 475.49k. Company insiders have collectively bought US$747k more than they sold, via options and on-market transactions, in the last 12 months. Reported Earnings • Sep 03
Full year 2022 earnings: EPS and revenues exceed analyst expectations Full year 2022 results: EPS: US$0.078 (down from US$0.44 in FY 2021). Revenue: US$43.1m (up 9.8% from FY 2021). Net income: US$2.37m (down 82% from FY 2021). Profit margin: 5.5% (down from 33% in FY 2021). The decrease in margin was driven by higher expenses. Revenue exceeded analyst estimates by 3.3%. Earnings per share (EPS) also surpassed analyst estimates by 14%. Over the next year, revenue is expected to shrink by 9.7% compared to a 9.1% growth forecast for the Luxury industry in the US. Over the last 3 years on average, earnings per share has increased by 59% per year but the company’s share price has fallen by 5% per year, which means it is significantly lagging earnings. Recent Insider Transactions • May 28
Independent Chairman recently bought US$103k worth of stock On the 26th of May, Neal Goldman bought around 79k shares on-market at roughly US$1.31 per share. This was the largest purchase by an insider in the last 3 months. Neal has been a buyer over the last 12 months, purchasing a net total of US$110k worth in shares. Reported Earnings • May 06
Third quarter 2022 earnings: EPS in line with expectations, revenues disappoint Third quarter 2022 results: EPS: US$0.011 (down from US$0.035 in 3Q 2021). Revenue: US$9.75m (up 3.3% from 3Q 2021). Net income: US$338.5k (down 67% from 3Q 2021). Profit margin: 3.5% (down from 11% in 3Q 2021). Revenue missed analyst estimates by 4.4%. Earnings per share (EPS) were mostly in line with analyst estimates. Over the next year, revenue is forecast to grow 7.4%, compared to a 11% growth forecast for the industry in the US. Over the last 3 years on average, earnings per share has increased by 63% per year but the company’s share price has fallen by 5% per year, which means it is significantly lagging earnings. Price Target Changed • Apr 27
Price target decreased to US$3.25 Down from US$4.00, the current price target is provided by 1 analyst. New target price is 129% above last closing price of US$1.42. Stock is down 54% over the past year. The company is forecast to post earnings per share of US$0.07 for next year compared to US$0.44 last year. Recent Insider Transactions Derivative • Feb 12
Independent Chairman exercised options to buy US$89k worth of stock. On the 7th of February, Neal Goldman exercised options to buy 49k shares at a strike price of around US$1.12, costing a total of US$55k. This transaction amounted to 4.4% of their direct individual holding at the time of the trade. Since March 2021, Neal's direct individual holding has increased from 975.33k shares to 1.10m. Company insiders have collectively bought US$833k more than they sold, via options and on-market transactions, in the last 12 months. Major Estimate Revision • Feb 11
Consensus forecasts updated The consensus outlook for 2022 has been updated. 2022 EPS estimate fell from US$0.14 to US$0.07 per share. Revenue forecast steady at US$44.2m. Net income forecast to shrink 76% next year vs 12% growth forecast for Luxury industry in the US . Consensus price target down from US$4.00 to US$3.25. Share price fell 15% to US$1.91 over the past week. Price Target Changed • Feb 08
Price target decreased to US$3.25 Down from US$3.75, the current price target is provided by 1 analyst. New target price is 71% above last closing price of US$1.90. Stock is down 29% over the past year. The company is forecast to post earnings per share of US$0.07 for next year compared to US$0.44 last year. Reported Earnings • Feb 04
Second quarter 2022 earnings: Revenues exceed analysts expectations while EPS lags behind Second quarter 2022 results: EPS: US$0.039 (down from US$0.087 in 2Q 2021). Revenue: US$13.8m (up 13% from 2Q 2021). Net income: US$1.17m (down 54% from 2Q 2021). Profit margin: 8.5% (down from 21% in 2Q 2021). The decrease in margin was driven by higher expenses. Revenue exceeded analyst estimates by 2.6%. Earnings per share (EPS) missed analyst estimates by 20%. Over the next year, revenue is forecast to grow 5.6%, compared to a 12% growth forecast for the industry in the US. Over the last 3 years on average, earnings per share has increased by 59% per year but the company’s share price has only increased by 21% per year, which means it is significantly lagging earnings growth. Recent Insider Transactions Derivative • Dec 10
Independent Director exercised options to buy US$466k worth of stock. On the 7th of December, Benedetta Casamento exercised options to buy 164k shares at a strike price of around US$1.07, costing a total of US$175k. This transaction amounted to 244% of their direct individual holding at the time of the trade. Since September 2021, Benedetta has owned 67.10k shares directly. Company insiders have collectively bought US$1.0m more than they sold, via options and on-market transactions, in the last 12 months. Reported Earnings • Nov 10
First quarter 2022 earnings released: EPS US$0.028 (vs US$0.03 in 1Q 2021) The company reported a soft first quarter result with weaker earnings and profit margins, although revenues improved. First quarter 2022 results: Revenue: US$10.3m (up 30% from 1Q 2021). Net income: US$827.0k (down 5.4% from 1Q 2021). Profit margin: 8.0% (down from 11% in 1Q 2021). The decrease in margin was driven by higher expenses. Over the last 3 years on average, earnings per share has increased by 49% per year but the company’s share price has increased by 56% per year, which means it is tracking significantly ahead of earnings growth. Recent Insider Transactions Derivative • Sep 18
Independent Director exercised options to buy US$246k worth of stock. On the 15th of September, Ollin Sykes exercised options to buy 85k shares at a strike price of around US$1.17, costing a total of US$100k. This transaction amounted to 9.6% of their direct individual holding at the time of the trade. Since September 2020, Ollin's direct individual holding has decreased from 929.87k shares to 891.96k. Company insiders have collectively bought US$722k more than they sold, via options and on-market transactions, in the last 12 months. Reported Earnings • Sep 05
Full year 2021 earnings released: EPS US$0.44 (vs US$0.21 loss in FY 2020) The company reported a strong full year result with improved earnings, revenues and profit margins. Full year 2021 results: Revenue: US$39.2m (up 34% from FY 2020). Net income: US$12.8m (up US$19.0m from FY 2020). Profit margin: 33% (up from net loss in FY 2020). The move to profitability was primarily driven by higher revenue. Over the last 3 years on average, earnings per share has increased by 22% per year but the company’s share price has increased by 43% per year, which means it is tracking significantly ahead of earnings growth. Recent Insider Transactions Derivative • Jun 28
Independent Chairman exercised options to buy US$128k worth of stock. On the 23rd of June, Neal Goldman exercised options to buy 40k shares at a strike price of around US$1.37, costing a total of US$55k. This transaction amounted to 4.1% of their direct individual holding at the time of the trade. Since September 2020, Neal's direct individual holding has increased from 656.11k shares to 1.02m. Company insiders have collectively bought US$832k more than they sold, via options and on-market transactions, in the last 12 months. Valuation Update With 7 Day Price Move • Jun 28
Investor sentiment improved over the past week After last week's 17% share price gain to US$3.19, the stock trades at a forward P/E ratio of 17x. Average forward P/E is 19x in the Luxury industry in the US. Total returns to shareholders of 198% over the past three years. Recent Insider Transactions Derivative • Mar 18
Independent Chairman exercised options to buy US$175k worth of stock. On the 10th of March, Neal Goldman exercised options to buy 63k shares at a strike price of around US$1.23, costing a total of US$77k. This transaction amounted to 6.9% of their direct individual holding at the time of the trade. Since September 2020, Neal's direct individual holding has increased from 656.11k shares to 975.33k. Company insiders have collectively bought US$755k more than they sold, via options and on-market transactions, in the last 12 months. Is New 90 Day High Low • Mar 10
New 90-day high: US$2.80 The company is up 119% from its price of US$1.28 on 09 December 2020. The American market is up 7.0% over the last 90 days, indicating the company outperformed over that time. It also outperformed the Luxury industry, which is up 1.0% over the same period. Recent Insider Transactions Derivative • Mar 01
Independent Director exercised options to buy US$135k worth of stock. On the 23rd of February, Ollin Sykes exercised options to buy 57k shares at a strike price of around US$1.32, costing a total of US$75k. This transaction amounted to 6.9% of their direct individual holding at the time of the trade. Since September 2020, Ollin's direct individual holding has decreased from 929.87k shares to 822.60k. Company insiders have collectively bought US$678k more than they sold, via options and on-market transactions, in the last 12 months. Recent Insider Transactions Derivative • Feb 18
Independent Chairman exercised options to buy US$332k worth of stock. On the 12th of February, Neal Goldman exercised options to buy 140k shares at a strike price of around US$1.11, costing a total of US$155k. This transaction amounted to 27% of their direct individual holding at the time of the trade. Since September 2020, Neal's direct individual holding has decreased from 656.11k shares to 522.22k. Company insiders have collectively bought US$592k more than they sold, via options and on-market transactions, in the last 12 months. Is New 90 Day High Low • Feb 06
New 90-day high: US$2.39 The company is up 140% from its price of US$1.00 on 06 November 2020. The American market is up 15% over the last 90 days, indicating the company outperformed over that time. It also outperformed the Luxury industry, which is up 16% over the same period. Reported Earnings • Feb 06
Second quarter 2021 earnings released: EPS US$0.087 (vs US$0.028 in 2Q 2020) The company reported a strong second quarter result with improved earnings, revenues and profit margins. Second quarter 2021 results: Revenue: US$12.1m (up 14% from 2Q 2020). Net income: US$2.52m (up 209% from 2Q 2020). Profit margin: 21% (up from 7.6% in 2Q 2020). Over the last 3 years on average, earnings per share has fallen by 61% per year but the company’s share price has increased by 20% per year, which means it is well ahead of earnings. Analyst Estimate Surprise Post Earnings • Feb 06
Revenue and earnings beat expectations Revenue exceeded analyst estimates by 7.5%. Earnings per share (EPS) also surpassed analyst estimates by 200%. Over the next year, revenue is forecast to grow 13%, compared to a 19% growth forecast for the Luxury industry in the US. Recent Insider Transactions Derivative • Jan 29
Independent Chairman exercised options to buy US$92k worth of stock. On the 22nd of January, Neal Goldman exercised options to buy 55k shares at a strike price of around US$1.00, costing a total of US$55k. This transaction amounted to 12% of their direct individual holding at the time of the trade. Since September 2020, Neal's direct individual holding has decreased from 656.11k shares to 522.22k. Company insiders have collectively bought US$387k more than they sold, via options and on-market transactions, in the last 12 months. Is New 90 Day High Low • Jan 08
New 90-day high: US$1.35 The company is up 48% from its price of US$0.91 on 09 October 2020. The American market is up 11% over the last 90 days, indicating the company outperformed over that time. It also outperformed the Luxury industry, which is up 15% over the same period. Recent Insider Transactions Derivative • Dec 16
Independent Chairman exercised options to buy US$82k worth of stock. On the 10th of December, Neal Goldman exercised options to buy 61.11k shares at a strike price of around US$0.90, costing a total of US$55k. This transaction amounted to 15% of their direct individual holding at the time of the trade. Since September 2020, Neal's direct individual holding has decreased from 656.11k shares to 406.11k. Company insiders have collectively bought US$282k more than they sold, via options and on-market transactions, in the last 12 months. Is New 90 Day High Low • Dec 10
New 90-day high: US$1.28 The company is up 91% from its price of US$0.67 on 10 September 2020. The American market is up 13% over the last 90 days, indicating the company outperformed over that time. It also outperformed the Luxury industry, which is up 24% over the same period. 