One-glance verdict
Overvalued
$-38.43 our estimate vs market $33.45
Wall Street consensus: $42.00 (-209.3% lower than our fair-value estimate)
187% below our estimate, beyond the bull case
Fundamentals snapshot
Advantage Solutions Inc.
ADV · NMS · Communication Services · Advertising Agencies
Current price
$33.45
52-week range
$12.22 - $49.75
Market cap
$444.73M
Balance sheet
Distressed
0.12x Concerning
Net debt $1.44B. Interest coverage shows how many times profit covers the interest bill.
What stands out
2 Rewards
2 Risks
2 rewards · 2 risks
- Reward Revenue grew 1.8% last year.
- Reward Free cash flow was positive in 8/10 years.
- Risk Return on equity was -50.8% last year — the company lost money on shareholders' equity.
- Risk Operating margin compressed from 2.2% to 0.8% over 3 years.
What this company does
Advantage Solutions Inc.
Advantage Solutions acts as a behind-the-scenes helper for consumer brands and large retail stores. The company primarily makes money by handling its clients' sales, marketing, and in-store displays, such as helping a new snack get on the shelf or offering free samples at a supermarket. This is important because it allows major brands and retailers to outsource these complex tasks to a specialist instead of trying to manage it all themselves.
How the company got here
Advantage Solutions started in 1987 as a small sales and marketing company in California helping makers of consumer packaged goods (everyday items you'd find in a grocery store) sell their products. Over the years, it grew by buying up many other regional companies, expanding its reach across the country. A major turning point was the 2017 acquisition of Daymon Worldwide, which significantly boosted its ability to help retailers with their own store brands. In 2020, the company became publicly traded on the stock market through a merger.
What it actually does
Think of Advantage Solutions as a behind-the-scenes helper for the brands and stores you see every day. They don't make products or own stores themselves; instead, they provide the people and services to help those companies sell more. This includes everything from getting a new snack food onto store shelves, to offering you a free sample of that snack at the grocery store, to helping a retailer develop its own brand of coffee. They work with thousands of brands in tens of thousands of retail locations to make sure products are available and appealing to shoppers.
Branded Services
This is the company's core business, acting like an extension of a brand's own sales team. Companies that make products like cereal, soda, or soap pay Advantage to get their products into stores and make sure they are well-positioned on the shelf. This segment also helps with marketing both in-store and online to encourage shoppers to buy the products. This part of the business has faced some challenges recently as the market has changed.
Experiential Services
This segment is all about creating direct experiences for shoppers to try products. When you see a table set up in a store offering free samples of a new yogurt or a demonstration of a new cleaning product, that's often the work of this division. Brands pay Advantage to run these events, both in physical stores and online, to convince you to try and buy their products. This has been a fast-growing and profitable part of the company.
Retailer Services
Instead of working for the product makers, this part of the company works directly for the retailers (the stores themselves). They help stores with a variety of tasks, such as managing their own private label brands (like a grocery store's own brand of milk or pasta), designing store layouts, and executing in-store merchandising (the way products are displayed). Retailers pay for these services to improve their stores and increase sales. This segment has been showing encouraging improvement and growth.
What management is betting on now
The company's leadership is focused on simplifying the business by selling off parts that aren't central to their main operations and becoming a more unified organization. A key priority is to better connect their different services so they can sell more to existing clients, a strategy known as cross-selling. They are also investing in technology to improve their services and provide better data and insights to the brands and retailers they work with. The overall goal is to focus on their core strengths, operate more efficiently, and strengthen their financial position by paying down debt.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$8.69M
FY2024 Q4
$-33.87M
FY2025 Q1
$-54.73M
FY2025 Q2
$-10.22M
FY2025 Q3
$52.19M
FY2025 Q4
$23.45M
FY2026 Q1
$12.33M
FY2026 Q2
$-15.95M
Revenue
$889.45M
Net income
$-62.71M
Diluted EPS
-4.85
Operating cash flow
$-6.52M
Free cash flow
$-15.95M
Fetching…
Sources
Revenue
$869.60M
Net income
$-71.83M
Diluted EPS
-5.49
Operating cash flow
$23.73M
Free cash flow
$12.33M
Fetching…
Sources
Revenue
$932.13M
Net income
$-161.73M
Diluted EPS
—
Operating cash flow
$45.63M
Free cash flow
$23.45M
Fetching…
Sources
Revenue
$915.01M
Net income
$20.57M
Diluted EPS
—
Operating cash flow
$63.63M
Free cash flow
$52.19M
Fetching…
Sources
Revenue
$873.71M
Net income
$-30.44M
Diluted EPS
-2.35
Operating cash flow
$-8.10M
Free cash flow
$-10.22M
Fetching…
Sources
Revenue
$821.79M
Net income
$-56.13M
Diluted EPS
-4.36
Operating cash flow
$-39.63M
Free cash flow
$-54.73M
Fetching…
Sources
Revenue
$874.69M
Net income
$-178.04M
Diluted EPS
—
Operating cash flow
$8.65M
Free cash flow
$-33.87M
Fetching…
Sources
Revenue
$939.27M
Net income
$-42.78M
Diluted EPS
-0.13
Operating cash flow
$34.02M
Free cash flow
$8.69M
Fetching…
Sources
Is it cheap or expensive?
Fair value $-38.43 vs current price $33.45
Wall Street consensus is the average analyst price target: $42.00 (-209.3% lower than our fair-value estimate).
Our most-likely fair value is $-38.43 a share — about 214.9% below today's price of $33.45, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Distressed
Net debt $1.4B. Interest coverage 0.1x.
Net debt
$1.44B
Interest coverage
0.12x
Advantage Solutions Inc.'s profit covers its interest bill about 0.1 times over. which is stronger than most peers shown here and 4 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Distressed
Worse cushion
Baseline
Better cushion
ADV
BASELINE
Advantage Solutions Inc.
Total debt $1.54B Interest coverage 0.12x This is the baseline the peer rows are being compared against.
Total debt $35.27M Interest coverage -5.03x -100% vs ADV This peer has almost no interest-payment cushion compared with ADV.
Total debt $1.71B Interest coverage 1.65x +1,333% vs ADV Carries about 14.3x more debt cushion than ADV.
Total debt $6.47B Interest coverage 0.79x +580% vs ADV Carries about 6.8x more debt cushion than ADV.
Total debt $21.90M Interest coverage -23.17x -100% vs ADV This peer has almost no interest-payment cushion compared with ADV.
Total debt $34.60M Interest coverage -5.51x -100% vs ADV This peer has almost no interest-payment cushion compared with ADV.
What you should know
The case for and against ADV
2 Rewards
2 Risks
Rewards
-
Revenue grew 1.8% last year.
-
Free cash flow was positive in 8/10 years.
Risks
-
Return on equity was -50.8% last year — the company lost money on shareholders' equity.
-
Operating margin compressed from 2.2% to 0.8% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
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Forward P/E
4.37x
P/B
1.07x
P/S
0.12x
EV/EBITDA
6.09x
PEG ratio
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Profitability
How much profit each dollar creates
Gross margin
13.5%
Operating margin
0.8%
Net margin
-7.6%
ROE
-50.8%
ROA
2.3%
Health
Liquidity and balance-sheet strength
Debt / equity
3.84x
Current ratio
1.79x
Quick ratio
1.59x
Total debt
$1.54B
Total cash
$102.31M
Growth
How the business has been compounding
Revenue TTM
$3.61B
Revenue 5Y CAGR
-0.4%
EPS TTM
-21.15
EPS 5Y CAGR
—
Cash flow
How much cash the business throws off
Operating CF TTM
$126.47M
Free CF TTM
$55.05M
FCF margin
1.5%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
—