Newegg (NEGG): Assessing Valuation Following Fresh 2025 Sales and Profit Guidance

Newegg Commerce (NEGG) just released its earnings guidance for the year ending December 31, 2025. The company projects net sales between $1.38 billion and $1.42 billion, along with an expected net loss between $15.8 million and $10.4 million.

See our latest analysis for Newegg Commerce.

Newegg’s latest earnings guidance arrives after a period of dramatic share price swings. The stock has delivered a remarkable year-to-date share price return of nearly 420%, with momentum building steadily over the short term, up almost 57% in the last 90 days. Even so, three-year total shareholder return is more subdued at just over 9%, reminding investors that recent excitement follows a more restrained longer-term track record.

If Newegg’s latest outlook has you scanning the market for similar fast-moving stories, consider broadening your search and discovering fast growing stocks with high insider ownership.

With shares surging and new guidance on the table, the key question now is whether Newegg remains undervalued or if the current price already reflects loftier future expectations, leaving little room for upside ahead.

Price-to-Sales of 0.7x: Is it justified?

Newegg Commerce trades at a price-to-sales (P/S) ratio of 0.7x, positioning its valuation well above the specialty retail sector average of 0.4x. At the last close of $46.34 per share, this premium suggests investors are pricing in stronger future prospects relative to industry norms.

The price-to-sales ratio measures how much investors are willing to pay for each dollar of a company’s revenue. It is especially useful for evaluating businesses like Newegg that are not currently profitable, since it focuses on top-line sales rather than earnings.

With the stock’s P/S multiple coming in high compared to sector peers, the market appears to be placing a bet on either future revenue growth or profit improvements. However, given Newegg’s recent track record of increasing losses and uncertain forecasts, this optimism stands out. If fair value benchmarks were also available, investors would be able to compare the current premium to a more fundamental level that the market could trend toward.

Compared to the US specialty retail industry average of 0.4x, Newegg’s price-to-sales ratio of 0.7x looks expensive. This larger multiple reflects higher expectations, but investors should consider whether the company’s fundamentals can justify it over time.

See what the numbers say about this price — find out in our valuation breakdown.

Result: Price-to-Sales of 0.7x (OVERVALUED)

However, weak recent annual profits and no clear revenue growth make the bullish outlook less certain if these trends persist.

Find out about the key risks to this Newegg Commerce narrative.

Another View: DCF Analysis Highlights Overvaluation

Switching perspectives, our SWS DCF model estimates Newegg's fair value at just $4.03 per share. The recent $46.34 closing price appears significantly overvalued by this measure. This method offers a much less optimistic perspective than the high price-to-sales ratio and raises questions about whether the market is anticipating too much future growth.

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Newegg Commerce for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Newegg Commerce Narrative

If you have a different perspective or prefer hands-on analysis, you can easily build your own interpretation with just a few minutes of your time, so why not Do it your way.

A great starting point for your Newegg Commerce research is our analysis highlighting 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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