Liquidity Services rallies following two-notch BofA/Merrill upgrade

BofA/Merrill's Nat Schneider has lifted Liquidity (LQDT +5.3%) all the way to Buy from Underperform, and has raised its PT to $45 from $28.50.

Schneider reports the salvage auction site's gross merchandise volume (GMV) grew 7.1% Y/Y in July and 14.5% in August after falling 11% in FQ3 (the June quarter) on an organic basis. As a result, he expects Liquidity to beat his prior FQ4 GMV estimate of $223M "by a large margin." The company's FQ4 GMV guidance stands at $200M-$225M.

Nonetheless, Schneider states it's "still difficult to explain why the only at-scale player with single digit penetration in a highly fragmented +$150bn reverse supply chain industry would show y/y organic declines in five of the first six months of 2013."

Shares still -12% YTD due to the disappointing numbers provided earlier this year. 37% of the float was shorted as of Aug. 15.

Comments (1)
  • dacama1
    , contributor
    Comments (221) | Send Message
    no acquisitions? fragmented but competitive? competitors not just standing by to get rolled over by LQDT?
    11 Sep 2013, 02:11 PM Reply Like
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