Personal Finance

Why Liquidity Services, Inc. Stock Jumped Today

Image source: Liquidity Services.

What: Shares of Liquidity Services Inc. (NASDAQ: LQDT) were up 10.4% as of 12:00 p.m. ET Thursday after the reverse supply chain specialist released stronger-than-expected fiscal third-quarter 2016 results.

So what: Quarterly revenue declined 5.2% year over year, to $85.2 million, and, based on generally accepted accounting principles (GAAP), translated to a net loss of $0.12 million, or roughly breakeven on a per-share basis. Gross merchandise volume (GMV), which measures the total sales value of all merchandise sold through the company's marketplaces, fell 7.8% year over year, to $178.5 million.

On an adjusted (non-GAAP) basis, which excludes items like share-based compensation, Liquidity Services achieved net income of $2.1 million, or $0.07 per share.

With that in mind, note three months ago Liquidity Services issued guidance for GMV in the range of $150 million to $175 million, and a quarterly adjusted loss per share in the range of $0.13 to $0.07.

Liquidity Services CEO Bill Angrick elaborated, "Our Q3 results were driven by strong volume and velocity of sales across our commercial and government client base as we continue to execute our transformation program, grow our buyer network, enhance our service offerings, and look toward future growth."

Now what: With the caveat that it's still difficult in the near term to forecast sales and margins due to variability in timing of projects, Liquidity Services anticipates fiscal fourth-quarter GMV in the range of $155 million to $170 million, a GAAP net loss per share in the range of $0.20 to $0.10, and an adjusted loss per diluted share in the range of $0.14 to $0.05. For perspective, analysts' consensus estimates predicted a fiscal Q4 adjusted net loss of $0.08 per share, well within Liquidity Services' expected range.

Of course, there's always the possibility that Liquidity Services is under promising with the intention of once again over delivering. But given its reasonably solid guidance and relative outperformance this quarter, it's no surprise to see shares trading higher today.

A secret billion-dollar stock opportunity

The world's biggest tech company forgot to show you something, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early in-the-know investors! To be one of them, just click here .

Steve Symington has no position in any stocks mentioned. The Motley Fool recommends Liquidity Services. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story


Other Topics


Latest Personal Finance Videos

The Motley Fool

Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Learn More