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NEGG

Newegg Commerce NasdaqCM:NEGG Stock Report

Last Price

US$3.84

Market Cap

US$1.4b

7D

7.6%

1Y

-80.2%

Updated

10 Aug, 2022

Data

Company Financials
NEGG fundamental analysis
Snowflake Score
Valuation1/6
Future Growth0/6
Past Performance4/6
Financial Health4/6
Dividends0/6

NEGG Stock Overview

Newegg Commerce, Inc. operates as an electronics-focused e-retailer in North America.

Newegg Commerce Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Newegg Commerce
Historical stock prices
Current Share PriceUS$3.84
52 Week HighUS$22.20
52 Week LowUS$3.15
Beta0
1 Month Change6.08%
3 Month Change-17.42%
1 Year Change-80.23%
3 Year Changen/a
5 Year Changen/a
Change since IPO-71.00%

Recent News & Updates

Jul 21

Newegg: Revenue Growth Supported By GMV Growth

We determined that the company's revenue growth decline in 2018 and 2019 was mainly driven by its decline in active customers during the period from 4 mln to 3.2 mln. We believe this is attributable to factors including the tax crackdown on customers, credit card data breaches, and counterfeit goods which may affect future growth. However, we still projected the company's revenue growth at a 3-year forward average of 16.5% driven by rising AOV and as the company's NPS score improved. Newegg Commerce, Inc (NEGG) is a US e-commerce company that focuses on electronics. The company operates both B2B and B2C platforms. We analyzed the company as its revenue growth had declined by 24.2% from FY2018 to FY2019 to identify the reasons for this decline and determined if these factors could impact its future revenue growth. Revenue Recovering From 2019 Low Newegg 2017 2018 2019 2020 2021 Total visits ('mln') 263.3 261.6 262.20 382.20 305.10 Growth % -0.6% 0.2% 45.8% -20.2% Number of active customers ('mln') 4 3.9 3.2 4.7 3.5 Growth % -2.5% -17.9% 46.9% -25.5% Gross Merchandise Value (GMV) ($ bln) 2.5 2.4 1.9 2.7 3 Growth % -4.0% -20.8% 42.1% 11.1% GMV per active customer 625.00 615.38 593.75 574.47 857.14 Growth % -1.5% -3.5% -3.2% 49.2% Average Order Value ($) 286 299 310 301 442 Growth % 4.5% 3.7% -2.9% 46.8% Take Rate 86.32% 84.27% 80.73% 78.33% 79.21% Growth % -2.4% -4.2% -3.0% 1.1% Conversion rate 3.4% 3.2% 2.4% 2.4% 2.3% Revenue ($ mln) 2,158 2,022 1,534 2,115 2,376 Growth % -6.3% -24.2% 37.9% 12.4% Source: Newegg, Khaveen Investments We analyzed the company's customers based on the total visits, number of active customers, average order value and conversion rate to identify the reason for the revenue decline from 2018 to 2019. Based on the table above, the company's revenue and GMV had positive growth in the past two years (2020 and 2021) which was an improvement compared to its negative growth in 2018 and 2019. GMV is calculated from the total number of active customers & GMV per active customer. Moreover, the company's total visits grew in the past 5 years which is in contrast to its active customers which declined, indicating that the company is not able to capture visits and convert them to sales. This is also witnessed by its decreasing conversion rate from 3.4% in 2017 to 2.3% in 2021. Furthermore, in 2021, we believe that the revenue growth was mainly driven by the increase in AOV (46.8%) which drove the growth in GMV per active customer at 49.2%. Thus, based on our analysis, all metrics showed an increase from 2018 to 2019 except for the number of active customers and GMV. Hence, we believe that the reason for its revenue decline is due to the decline in its active customers resulting in its GMV decreasing. Long-term Revenue Growth Supported by AOV Growth Based on our point above, we determined the company revenue growth in 2018 and 2019 was affected driven by the decline in active customers. We examined the potential factors to explain the decline in active customers. Below are the events we believe that had contributed to the decline in active customers in 2018 and 2019: Tax Bills: In March 2018, Newegg customers in Connecticut were affected by the tax crackdown. Newegg had shared the past purchase records of its customers with the Department of Revenue Services ('DRS') which went after customers on the sales tax issue. Credit Card Hacking: In September 2018, for one month period, Newegg had a data breach involving customers' credit card info. Some customers' info may have been stolen and Newegg responded to the issue by sending emails to its customers. Counterfeited Goods: In April 2019, a study by the Government Accountability Office found that 40% of commonly counterfeited products were fake on websites including Amazon (AMZN), Sears, Walmart (WMT), eBay (EBAY) and Newegg We believe that all these events cumulatively affected consumer trust and affect the growth of Newegg's active customers in 2018 and 2019. However, we believe that the tax issue would not continue to affect the company's revenue growth as it was only in one state and is a one-off event. That said, we believe there could still be counterfeit goods reportedly sold on Newegg hence this may affect the company's future revenue and we could not find any measures Newegg had implemented to prevent future security breaches. Hence, we believe that these two events may happen again in the future and affect Newegg's revenue growth.

Shareholder Returns

NEGGUS Online RetailUS Market
7D7.6%2.0%0.3%
1Y-80.2%-30.9%-13.5%

Return vs Industry: NEGG underperformed the US Online Retail industry which returned -30.9% over the past year.

Return vs Market: NEGG underperformed the US Market which returned -13.5% over the past year.

Price Volatility

Is NEGG's price volatile compared to industry and market?
NEGG volatility
NEGG Average Weekly Movement13.7%
Online Retail Industry Average Movement12.9%
Market Average Movement7.9%
10% most volatile stocks in US Market17.2%
10% least volatile stocks in US Market3.2%

Stable Share Price: NEGG is more volatile than 75% of US stocks over the past 3 months, typically moving +/- 14% a week.

Volatility Over Time: NEGG's weekly volatility (14%) has been stable over the past year, but is still higher than 75% of US stocks.

About the Company

FoundedEmployeesCEOWebsite
20012,205Anthony Chowhttps://www.newegg.com

Newegg Commerce, Inc. operates as an electronics-focused e-retailer in North America. The company offers desktops, laptops, gaming laptops, peripherals, and accessories; CPU/processors, graphic cards, motherboards, storage devices, and computer accessories; home video, home audio, headphones, pro audio/video, cellphones, wearables, and digital cameras; Xbox, Playstation, legacy gaming, and gaming titles; and home networking, commercial networking, server and components, and smart home products. It also provides display and printing, office technology furniture, office supplies, and mailing and inventory supplies; software, digital downloads, warranty and services, 3rd party gift cards, and entertainment products; car electronics, marine and aviation, motorcycles and ATV, performance parts, tools and equipment, and wheels and tires; home improvement tools, home appliances, kitchen utensils, outdoor and garden furniture, pet supplies, and generators; and fitness, sports, and health and beauty supplies.

Newegg Commerce Fundamentals Summary

How do Newegg Commerce's earnings and revenue compare to its market cap?
NEGG fundamental statistics
Market CapUS$1.42b
Earnings (TTM)US$36.26m
Revenue (TTM)US$2.38b

39.2x

P/E Ratio

0.6x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
NEGG income statement (TTM)
RevenueUS$2.38b
Cost of RevenueUS$2.05b
Gross ProfitUS$325.98m
Other ExpensesUS$289.71m
EarningsUS$36.26m

Last Reported Earnings

Dec 31, 2021

Next Earnings Date

n/a

Earnings per share (EPS)0.098
Gross Margin13.72%
Net Profit Margin1.53%
Debt/Equity Ratio4.6%

How did NEGG perform over the long term?

See historical performance and comparison
We’ve recently updated our valuation analysis.

Valuation

Is NEGG undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

1/6

Valuation Score 1/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for NEGG?

Other financial metrics that can be useful for relative valuation.

NEGG key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue0.6x
Enterprise Value/EBITDA32.2x
PEG Ration/a

Price to Earnings Ratio vs Peers

How does NEGG's PE Ratio compare to its peers?

NEGG PE Ratio vs Peers
The above table shows the PE ratio for NEGG vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average28.4x
OSTK Overstock.com
18.5x13.2%US$1.3b
QRTE.A Qurate Retail
11.6x39.3%US$1.4b
SEAT Vivid Seats
132.3x23.4%US$1.7b
RVLV Revolve Group
23.6x21.3%US$2.0b
NEGG Newegg Commerce
37.2xn/aUS$1.3b

Price-To-Earnings vs Peers: NEGG is good value based on its Price-To-Earnings Ratio (39.2x) compared to the peer average (46.5x).


Price to Earnings Ratio vs Industry

How does NEGG's PE Ratio compare vs other companies in the US Online Retail Industry?

Price-To-Earnings vs Industry: NEGG is expensive based on its Price-To-Earnings Ratio (39.2x) compared to the US Online Retail industry average (18.1x)


Price to Earnings Ratio vs Fair Ratio

What is NEGG's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

NEGG PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio39.2x
Fair PE Ration/a

Price-To-Earnings vs Fair Ratio: Insufficient data to calculate NEGG's Price-To-Earnings Fair Ratio for valuation analysis.


Share Price vs Fair Value

What is the Fair Price of NEGG when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: Insufficient data to calculate NEGG's fair value for valuation analysis.

Significantly Below Fair Value: Insufficient data to calculate NEGG's fair value for valuation analysis.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Insufficient data to show price forecast.


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Future Growth

How is Newegg Commerce forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


46.7%

Forecasted Retail industry annual growth in earnings

In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Newegg Commerce has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.


Discover growth companies

Past Performance

How has Newegg Commerce performed over the past 5 years?

Past Performance Score

4/6

Past Performance Score 4/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


87.3%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: NEGG has high quality earnings.

Growing Profit Margin: NEGG's current net profit margins (1.5%) are higher than last year (1.4%).


Past Earnings Growth Analysis

Earnings Trend: NEGG's earnings have grown significantly by 87.3% per year over the past 5 years.

Accelerating Growth: NEGG's earnings growth over the past year (19.2%) is below its 5-year average (87.3% per year).

Earnings vs Industry: NEGG earnings growth over the past year (19.2%) exceeded the Online Retail industry -36.3%.


Return on Equity

High ROE: NEGG's Return on Equity (19.9%) is considered low.


Discover strong past performing companies

Financial Health

How is Newegg Commerce's financial position?

Financial Health Score

4/6

Financial Health Score 4/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: NEGG's short term assets ($439.0M) exceed its short term liabilities ($356.3M).

Long Term Liabilities: NEGG's short term assets ($439.0M) exceed its long term liabilities ($88.0M).


Debt to Equity History and Analysis

Debt Level: NEGG has more cash than its total debt.

Reducing Debt: Insufficient data to determine if NEGG's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: NEGG's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: NEGG earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet


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Dividend

What is Newegg Commerce current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage

Dividend Yield vs Market

Notable Dividend: Unable to evaluate NEGG's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate NEGG's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if NEGG's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if NEGG's dividend payments have been increasing.


Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as NEGG has not reported any payouts.


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Management

How experienced are the management team and are they aligned to shareholders interests?

2.3yrs

Average board tenure


CEO

Anthony Chow (57 yo)

no data

Tenure

Mr. Anthony K. Chow is the Chief Executive Officer and Director of Newegg Commerce, Inc. He serves as Director at Shenzhen Investment Control East China Sea Investment Co., Ltd. (formerly known as TopoScen...


Board Members

Experienced Board: NEGG's board of directors are not considered experienced ( 2.3 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Newegg Commerce, Inc.'s employee growth, exchange listings and data sources


Key Information

  • Name: Newegg Commerce, Inc.
  • Ticker: NEGG
  • Exchange: NasdaqCM
  • Founded: 2001
  • Industry: Internet and Direct Marketing Retail
  • Sector: Retail
  • Implied Market Cap: US$1.420b
  • Shares outstanding: 369.72m
  • Website: https://www.newegg.com

Number of Employees


Location

  • Newegg Commerce, Inc.
  • 17560 Rowland Street
  • City Of Industry
  • California
  • 91748
  • United States

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/08/10 00:00
End of Day Share Price2022/08/10 00:00
Earnings2021/12/31
Annual Earnings2021/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.