Advantage Solutions Inc (ADV, Financial), a company operating within the diversified media industry, has experienced a notable fluctuation in its stock price over recent periods. With a current market capitalization of $1.22 billion, the stock is trading at $3.75. Over the past week, the stock has seen a decline of 6.48%, yet this short-term loss contrasts with a significant gain of 30.21% over the past three months. According to GuruFocus's valuation metrics, the stock is currently modestly undervalued with a GF Value of $5.15, compared to a past GF Value of $7.04. This suggests a shift from a previous assessment of being a possible value trap to a more favorable investment opportunity.
Company Overview
Advantage Solutions Inc specializes in providing outsourced sales and marketing solutions to consumer goods companies and retailers. Its technology-enabled platform delivers a suite of services including headquarter sales, retail merchandising, in-store sampling, digital commerce, and shopper marketing. The company's global reach extends through North America and into Africa, Asia, Australia, and Europe, catering to the needs of manufacturers of various scales. Advantage Solutions operates through two primary segments: sales and marketing, aiming to enhance product visibility and consumer engagement while optimizing costs for its clients.
Profitability Analysis
When it comes to profitability, Advantage Solutions Inc holds a Profitability Rank of 4/10. The company's operating margin stands at 1.53%, which is better than 43.91% of 1027 companies in the same industry. However, the Return on Equity (ROE) is deeply negative at -109.01%, and the Return on Assets (ROA) is also in the red at -33.59%. The Return on Invested Capital (ROIC) is 1.48%, indicating some efficiency in generating cash flow relative to capital invested. Over the past decade, the company has managed to be profitable for three years, which is better than 24.2% of its peers.
Growth Prospects
The Growth Rank for Advantage Solutions Inc is currently at a low 1/10. The company has experienced a 3-Year Revenue Growth Rate per Share of -11.90%, which is better than 23.64% of 956 companies in the industry. The 5-Year Revenue Growth Rate per Share is also negative at -1.90%. However, looking forward, the Total Revenue Growth Rate (Future 3Y To 5Y Est) is estimated at 5.06%, which is more optimistic and better than 52.63% of the companies. This suggests potential for improvement and a turnaround in the company's growth trajectory.
Notable Shareholders
Among the notable shareholders of Advantage Solutions Inc, Seth Klarman (Trades, Portfolio) holds the largest stake with 6,153,982 shares, representing 1.89% of the company. Following him is Jim Simons (Trades, Portfolio) with 408,800 shares, accounting for 0.13%, and Joel Greenblatt (Trades, Portfolio) with a minimal stake of 12,058 shares. These prominent investors' involvement may signal confidence in the company's future prospects despite the current challenges.
Competitive Landscape
In comparison to its competitors, Advantage Solutions Inc stands with a market cap of $1.22 billion. Deluxe Corp (DLX, Financial) has a slightly lower market cap of $894.823 million, while Clear Channel Outdoor Holdings Inc (CCO, Financial) is valued at $792.136 million. Magnite Inc (MGNI, Financial), another competitor, is closely matched with a market cap of $1.23 billion. This positioning indicates that Advantage Solutions Inc is a significant player within its industry, holding its ground against competitors with similar market capitalizations.
Conclusion
In summary, Advantage Solutions Inc's stock performance has been a mixed bag, with a recent decline over the past week but a substantial gain over the past three months. The company's current valuation suggests it is modestly undervalued, offering a potentially attractive entry point for investors. While its profitability metrics present some concerns, particularly the negative ROE and ROA, the company's growth estimates for the near future provide a glimmer of hope. The presence of high-profile investors like Seth Klarman (Trades, Portfolio) may also lend some investor confidence. When placed against its competitors, Advantage Solutions Inc maintains a competitive market cap, reinforcing its standing in the diversified media industry. Value investors may find the current assessment of Advantage Solutions Inc worth considering, especially in light of its potential for growth and improved profitability.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
