Why Liquidity Services Shares Got Crushed

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of auction portal operator Liquidity Services (NASDAQ: LQDT  ) plummeted 25% today after the company's quarterly results and outlook disappointed Wall Street.

So what: Liquidity Services' first-quarter profit managed to top estimates, but a miss on the top line -- revenue of $122.2 million versus the consensus of $130.7 million -- coupled with downbeat full-year guidance reinforces recent concerns over slowing growth. Specifically, management expects the weak economy to continue taking its toll on retail and industrial supply chains, forcing analysts to lower their valuation estimates yet again.

Now what: The company now sees full-year adjusted EPS of $1.90-$2.02, down from its prior view of $2.05-$2.23 and also well below the consensus of $2.15. "We remain focused on executing our long-term growth strategy to achieve $2 billion in [gross merchandise volume] by fiscal year 2016," Chairman and CEO Bill Angrick reassured investors. So while the short-term outlook is certainly disappointing for Liquidity Services bulls, today's big pullback might be an opportunity to buy more for the long haul.

Interested in more info on Liquidity Services? Add it to your watchlist.

2013 and beyond
The Motley Fool's chief investment officer has selected his No. 1 stock for the next year. Find out which stock it is in our brand-new free report: "The Motley Fool's Top Stock for 2013." I invite you to take a copy, free for a limited time. Just click here to access the report and find out the name of this under-the-radar company.


Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2228388, ~/Articles/ArticleHandler.aspx, 12/22/2014 6:37:08 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement