Balance Sheet As Of 2020-02-01
With an assets to liabilities ratio of more than 1x, BBW’s balance sheet looks stable. In Q4, the total amount of assets was equal to $261 million, with total liabilities of $195 million. The balance sheet shows deferred revenue of $21 million, which I appreciate. Deferred revenue represents a prepayment by BBW’s clients that have yet to be delivered. All in all, Build-A-Bear Workshop Inc receives cash in advance of it being earned. Furthermore, Build-A-Bear Workshop Inc has positive working capital, which traders will like. It means that BBW can cover its short-term liabilities when they come due.
BBW’s short term debt is less significant than the company’s cash and cash equivalents. In my opinion, Build-A-Bear Workshop Inc may not have to worry about any liquidity risk. In addition, the price to book value is below 1. 5x, which means that BBW is undervalued.
In addition, notice that the cash per share is equal to $1, and the stock price is $7. 35. BBW’s debt to equity ratio is below 2x. All in all, the debt level appears to be under control. Note that Build-A-Bear Workshop Inc reports cash and cash equivalents of $34 million, and net debt of $99 million. I appreciate Build-A-Bear Workshop Inc since it reports EV/Free Cash Flow of 1. In my view, other value investors will love BBW’s ability to produce cash flow. BBW’s EV/Operating Cash Flow is equal to 3x. I cannot really understand why Build-A-Bear Workshop Inc trades cheaply.
Quarterly Results For The Quarter Ended 2021-01-31
In Q4 BBW reported quarterly sales of $93 million, and gross profit of $46 million. The gross profit ratio was equal to 50%. In addition, BBW is profitable, which is valuable. Build-A-Bear Workshop Inc released positive quarterly EBITDA of $9. 168 million. I do appreciate it. BBW also showed positive net income of $8. 843 million. Taking this into account, many traders will most likely have a look at BBW.
Valuation and Risks
Build-A-Bear Workshop Inc has a market capitalization of $117 million. The enterprise value is equal to $157 million. With forward sales of $255 million, BBW sells at less than 2x forward sales. In my view, investors will most likely believe that Build-A-Bear Workshop Inc is cheap. Institutional investors CANNELL CAPITAL LLC, Squarepoint Ops LLC, and MORGAN STANLEY are Build-A-Bear Workshop Inc investors.
The following BBW’s insiders acquired or sold equity recently.BBW’s traders will most likely study this information:
+In 2020-10-06, officer: Chief Operations Officer Hurt J. Christopher acquired equity of BBW.
+In 2020-10-06, officer: Chief Merchandising Officer Kretchmar Jennifer acquired stock of BBW.
+In 2020-10-06, officer: Chief Financial Officer Todorovic Vojin acquired equity of BBW.
Build-A-Bear Workshop, Inc. operates as a specialty retailer of plush animals and related products. The company operates through three segments: Direct-to-Consumer, International Franchising, and Commercial.
If you see an error, please contact the editor. We don’t own BBW’s shares, and this is our opinion. We do not offer a recommendation to buy or sell any stock.