Long-established in the Conglomerates industry, 1847 Holdings LLC (EFSH, Financial) has enjoyed a stellar reputation. However, it has recently witnessed a decline of 12.57%, juxtaposed with a three-month change of -68.99%. Fresh insights from the GuruFocus Score Rating hint at potential headwinds. Notably, its diminished rankings in financial strength, growth, and valuation suggest that the company might not live up to its historical performance. Join us as we dive deep into these pivotal metrics to unravel the evolving narrative of 1847 Holdings LLC.
Understanding the GF Score
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- 1. Financial strength rank: 2/10
- 2. Profitability rank: 3/10
- 3. Growth rank: 6/10
- 4. GF Value rank: 2/10
- 5. Momentum rank: 1/10
Based on the above method, GuruFocus assigned 1847 Holdings LLC the GF Score of 51 out of 100, which signals poor future outperformance potential.
1847 Holdings LLC: A Snapshot
1847 Holdings LLC is a diversified holding company with a market cap of $4.05 million. It operates in three segments: Retail and appliances, Construction, and Automotive Supplies. The company generates maximum revenue from the Construction segment. The firm, through its subsidiaries, provides a wide range of land application services and sells equipment and parts, primarily to the agricultural, construction, and lawn and garden industries. Its sales stand at $58.76 million with an operating margin of -12.02%.
Financial Strength Breakdown
1847 Holdings LLC's financial strength indicators present some concerning insights about the company's balance sheet health. The company's interest coverage ratio of 0 positions it worse than 0% of 384 companies in the Conglomerates industry. This ratio highlights potential challenges the company might face when handling its interest expenses on outstanding debt. It's worth noting that the esteemed investor Benjamin Graham typically favored companies with an interest coverage ratio of at least five.
The company's Altman Z-Scoreis just -0.53, which is below the distress zone of 1.81. This suggests that the company may face financial distress over the next few years. Additionally, the company's low cash-to-debt ratio at 0.02 indicates a struggle in handling existing debt levels. The company's debt-to-equity ratio is 28.73, which is worse than 99.76% of 416 companies in the Conglomerates industry. A high debt-to-equity ratio suggests over-reliance on borrowing and vulnerability to market fluctuations.
Profitability Breakdown
1847 Holdings LLC's low Profitability rank can also raise warning signals. Additionally, 1847 Holdings LLC's Gross Margin has also declined over the past five years, as evidenced by the data: 2018: 55.75; 2019: 60.05; 2020: 25.32; 2021: 34.44; 2022: 32.09. This trend underscores the company's struggles to convert its revenue into profits.
Conclusion
Given the company's financial strength, profitability, and growth metrics, the GuruFocus Score Rating highlights the firm's unparalleled position for potential underperformance. While 1847 Holdings LLC has a history of strong performance, its current financial indicators suggest that it may struggle to maintain this trend. Investors should consider these factors when making investment decisions.
GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen
