Breaking Down XPEL, Inc. (XPEL) Financial Health: Key Insights for Investors

As an investor, are you keeping a close watch on the financial performance of XPEL Inc. (XPEL)? Did you know that in 2024, the company's revenue reached $420.4 million, marking a 6.1% increase from the previous year? However, net income saw a 13.8% decrease, settling at $45.5 million. How will these figures impact your investment strategy? Let's delve deeper into the key financial insights of XPEL to help you make informed decisions.

XPEL, Inc. (XPEL) Revenue Analysis

Understanding XPEL, Inc.'s (XPEL) revenue streams is crucial for investors seeking insights into the company's financial health and growth potential. XPEL is a global provider of protective films and coatings, catering to the automotive and architectural industries. Its revenue is derived from a variety of sources, including product sales, installation services, and regional contributions.

Here's a detailed breakdown of XPEL's revenue streams:

• Primary Revenue Sources:
• Protective Films (Paint Protection Film or PPF): XPEL specializes in automotive paint protection film, surface protection film. Paint protection film accounted for 53.9% of total consolidated revenue.
• Window Films: The company offers automotive, commercial, and residential window films. Window film represented 18.5% of total revenue.
• Ceramic Coatings and Installation Tools: XPEL also generates revenue from ceramic coatings, installation tools and accessories. Other product revenue, including ceramic coating and installation tools, contributed 3.4% to the total revenue.
• Installation Services: XPEL provides installation services for its products, contributing to the overall revenue. Total installation revenue (labor and product combined) grew 16.1% year-over-year.

For the year 2024, XPEL, Inc. reported:

• Total Revenue: $420.4 million, a 6.1% increase compared to the prior year.
• Q4 2024 Revenue: $107.5 million, a 1.9% increase compared to Q4 2023. Excluding China impacts, revenue increased 10.5% in the fourth quarter 2024.

The following table summarizes XPEL's revenue growth over the past several years:

Contribution of Different Business Segments:

• Window Film Revenue: Total window film revenue increased 32.9% year-over-year and represented 17.2% of total revenue.
• Service Revenue: Total service revenue increased 9.4% year-over-year.

Analysis of Significant Changes in Revenue Streams:

• Geographical Performance:
• United States: Revenue increased by 6.2%.
• Canada: Revenue increased by 15.3%.
• China: Revenue decreased significantly by 44.3% due to excess inventory levels. Excluding China, adjusted product revenue grew 9.3% year-over-year.
• Other Regions: Continental Europe, the United Kingdom, the Middle East/Africa, Asia Pacific, and Latin America experienced growth ranging from 4.8% to 68.9%.

Strategic initiatives, such as focusing on dealership partnerships, refining market strategies in China, and executing acquisition strategies, have been key areas of focus for XPEL. These efforts aim to boost revenue and expand the company's market presence. To gain further insights into XPEL's values, refer to Mission Statement, Vision, & Core Values of XPEL, Inc. (XPEL).

XPEL, Inc. (XPEL) Profitability Metrics

Analyzing XPEL, Inc.'s financial health involves a detailed look at its profitability metrics. Key indicators include gross profit, operating profit, and net profit margins, which reveal how efficiently the company converts revenue into profit. Examining these metrics over time helps identify trends and assess the sustainability of XPEL's profitability. Comparing these ratios with industry averages provides context and highlights XPEL's competitive positioning. Effective cost management and favorable gross margin trends are crucial for maintaining and improving profitability.

XPEL's financial performance can be evaluated through these critical profitability measures:

• Gross Profit Margin: Indicates the percentage of revenue remaining after deducting the cost of goods sold.
• Operating Profit Margin: Shows the percentage of revenue remaining after deducting operating expenses, reflecting the company's efficiency in managing its operations.
• Net Profit Margin: Represents the percentage of revenue that translates into net profit after all expenses, including taxes and interest, are accounted for.

Recent data regarding XPEL's profitability can be presented as follows:

Analyzing trends in these profitability ratios helps in understanding XPEL's financial trajectory and operational efficiency. A comparison against industry benchmarks would further contextualize these figures, providing insights into XPEL's relative performance.

Further insights and comprehensive analysis can be found at: Breaking Down XPEL, Inc. (XPEL) Financial Health: Key Insights for Investors

XPEL, Inc. (XPEL) Debt vs. Equity Structure

Understanding XPEL, Inc.'s (XPEL) approach to financing its operations and growth through debt and equity is crucial for investors. This involves analyzing the company's debt levels, key ratios, and recent financing activities to determine its financial stability and growth potential. Here’s a detailed look:

As of the fiscal year 2024, XPEL, Inc. (XPEL) demonstrates the following financial structure:

• Total Debt: XPEL, Inc. (XPEL) reported a total debt of $46.1 million.
• Long-Term Debt: The company holds long-term debt amounting to $44.5 million.
• Short-Term Debt: XPEL, Inc. (XPEL) has a short-term debt of $1.6 million.

The debt-to-equity ratio is a vital metric for assessing a company's financial leverage. As of the most recent data, XPEL, Inc.'s (XPEL) debt-to-equity ratio stands at 0.14. This ratio indicates that XPEL, Inc. (XPEL) has a relatively low level of debt compared to its equity, suggesting a conservative approach to financial leverage. When compared to industry standards, it’s important to consider the specific sector XPEL, Inc. (XPEL) operates in. Different industries have different norms for debt levels. However, a debt-to-equity ratio of 0.14 generally suggests that the company is not overly reliant on debt financing, which can be seen as a positive sign of financial health.

Recent activities in debt financing can provide insights into XPEL, Inc.'s (XPEL) strategic financial management. For instance, any recent debt issuances would indicate the company is raising capital, possibly for expansion or acquisitions. Credit ratings, if available, would offer an external assessment of XPEL, Inc.'s (XPEL) creditworthiness. Refinancing activities might suggest that XPEL, Inc. (XPEL) is optimizing its debt terms to reduce interest expenses or extend the maturity of its obligations. As of now, there are no notable activities in debt financing.

XPEL, Inc. (XPEL) strategically balances debt and equity to fund its operations and growth. While debt can provide a cost-effective means of financing, excessive debt can increase financial risk. Equity financing, on the other hand, dilutes ownership but strengthens the balance sheet. XPEL, Inc.'s (XPEL) current debt-to-equity ratio of 0.14 suggests a preference for equity or internally generated funds, which aligns with a more risk-averse financial strategy. This approach allows XPEL, Inc. (XPEL) to maintain financial flexibility and stability, which is particularly important in navigating market uncertainties and pursuing long-term growth opportunities.

For further insights into XPEL, Inc.'s (XPEL) strategic direction, explore Mission Statement, Vision, & Core Values of XPEL, Inc. (XPEL).

XPEL, Inc. (XPEL) Liquidity and Solvency

Liquidity and solvency are critical indicators of a company's financial health, revealing its ability to meet short-term obligations and sustain long-term operations. For XPEL, Inc. (XPEL), assessing these metrics provides valuable insights into its financial stability and risk profile.

Assessing XPEL, Inc.'s Liquidity:

Analyzing XPEL's liquidity involves examining its current and quick ratios, working capital trends, and cash flow statements. These components offer a comprehensive view of the company's ability to cover its immediate liabilities.

• Current and Quick Ratios: These ratios measure a company's ability to pay off its short-term liabilities with its short-term assets.

As of December 31, 2023, XPEL reported a current ratio of 2.72 and a quick ratio of 2.05. A current ratio of above 1 indicates that the company's assets are greater than its current liabilities. A quick ratio of more than 1 is preferable since it indicates that a company can easily pay off its short-term liabilities with its most liquid assets.

• Analysis of Working Capital Trends: Working capital, calculated as current assets minus current liabilities, indicates the company's operational liquidity.

XPEL's working capital as of December 31, 2023, was $117.4 million, compared to $82.4 million at the end of 2022. This increase shows the company's improved ability to cover its short-term liabilities with its current assets.

• Cash Flow Statements Overview: Examining the cash flow statements reveals trends in operating, investing, and financing activities, providing a more in-depth understanding of XPEL's liquidity.

Here’s an overview of XPEL's cash flow activities for the year 2023 (in thousands):

The positive cash flow from operations indicates that XPEL is generating sufficient cash from its core business activities. The cash used in investing activities reflects investments in property and equipment, which can support future growth. The cash used in financing activities primarily relates to stock repurchases.

Potential Liquidity Concerns or Strengths:

XPEL's strong current and quick ratios, increasing working capital, and positive cash flow from operations suggest a solid liquidity position. However, it is essential to monitor these metrics over time to identify any potential concerns. Factors such as economic downturns, increased competition, or significant changes in business strategy could impact XPEL's liquidity.

To gain more insight into the core values of the company, consider reading: Mission Statement, Vision, & Core Values of XPEL, Inc. (XPEL).

XPEL, Inc. (XPEL) Valuation Analysis

Determining whether XPEL, Inc. (XPEL) is overvalued or undervalued requires a multifaceted approach, incorporating key financial ratios, stock performance analysis, and analyst sentiment. Let's delve into these critical areas to provide a clearer picture for investors.

One method to assess valuation involves examining ratios like price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA). These metrics offer insights into how the market values XPEL relative to its earnings, book value, and operational cash flow. Keep in mind that a direct interpretation of these ratios can be misleading without comparing them against industry averages and XPEL's historical performance.

Analyzing XPEL's stock price trends over the past year (or longer) provides context on market sentiment and growth trajectory. Significant price appreciation might suggest strong investor confidence, while a declining trend could indicate concerns about future performance. For instance, consider these potential scenarios:

• If XPEL's stock has steadily increased over the last 12 months, it could reflect positive earnings reports and successful strategic initiatives.
• Conversely, a volatile stock price might signal market uncertainty or sensitivity to broader economic factors.

Currently, XPEL does not offer a dividend yield, so dividend payout ratios are not applicable. Should XPEL initiate dividends in the future, these ratios would become relevant in assessing the sustainability of dividend payments relative to earnings.

Here's a look at how analyst consensus can shape valuation perceptions:

• Buy Rating: A consensus of 'buy' ratings often suggests that analysts believe the stock is undervalued and has potential for future growth.
• Hold Rating: 'Hold' ratings indicate a neutral stance, suggesting the stock is fairly valued at its current price.
• Sell Rating: 'Sell' ratings imply that analysts think the stock is overvalued and may underperform in the future.

To illustrate, let's consider a hypothetical analyst consensus:

In this scenario, a majority of analysts have a 'buy' rating, potentially indicating a positive outlook on XPEL's valuation and future prospects.

Understanding XPEL's strategic direction can further contextualize its valuation. You can gain more insights through: Mission Statement, Vision, & Core Values of XPEL, Inc. (XPEL).

XPEL, Inc. (XPEL) Risk Factors

Understanding the risks facing XPEL, Inc. (XPEL) is crucial for investors assessing the company's financial health and future prospects. These risks span both internal and external factors, encompassing industry competition, regulatory changes, market conditions, and specific operational and strategic challenges.

Here's an overview of key risks impacting XPEL:

• Industry Competition: The surface protection and window film industry is competitive. New entrants, technological advancements by competitors, and shifting consumer preferences could erode XPEL's market share and profitability.
• Regulatory Changes: Changes in regulations related to automotive aftermarket products, environmental standards, or trade policies could adversely affect XPEL's operations and financial results. For instance, tariffs or trade restrictions could increase the cost of raw materials or finished goods.
• Market Conditions: Economic downturns or fluctuations in consumer spending on discretionary items like automotive upgrades can impact XPEL's sales. A decrease in new car sales or a general economic recession could reduce demand for XPEL's products.

Operational, financial, and strategic risks are often highlighted in XPEL's earnings reports and filings. These may include:

• Supply Chain Disruptions: Disruptions in the supply chain, whether due to natural disasters, geopolitical events, or other unforeseen circumstances, can impact XPEL's ability to source raw materials and manufacture products, leading to delays and increased costs.
• Product Quality and Liability: Any issues with product quality could lead to product recalls, warranty claims, and damage to XPEL's reputation, impacting financial performance.
• Integration Risks: XPEL's growth strategy may involve acquisitions. Integrating acquired companies can be complex, and failure to successfully integrate operations, technologies, and personnel could hinder the anticipated benefits of such acquisitions.

Mitigation strategies and plans, when available, are crucial for managing these risks. Examples of such strategies include:

• Diversification: Diversifying product offerings and expanding into new markets can reduce reliance on specific products or geographic regions, mitigating the impact of market-specific downturns.
• Strategic Sourcing: Establishing relationships with multiple suppliers and diversifying sourcing locations can reduce the risk of supply chain disruptions.
• Quality Control: Implementing rigorous quality control processes and investing in research and development can help maintain product quality and reduce the risk of recalls.

For further insights into XPEL's strategies and values, you can explore: Mission Statement, Vision, & Core Values of XPEL, Inc. (XPEL).

XPEL, Inc. (XPEL) Growth Opportunities

XPEL, Inc. (XPEL) demonstrates promising future growth prospects driven by several key factors. These include continuous product innovation, strategic market expansions, well-planned acquisitions, and unique competitive advantages.

Product innovation remains a cornerstone of XPEL's growth strategy. The company consistently invests in research and development to enhance its existing product lines and introduce new solutions that cater to evolving customer needs. This commitment to innovation helps XPEL maintain a competitive edge and attract a broader customer base. XPEL's dedication to innovation is evident in its diverse product offerings, which include:

• Paint Protection Film (PPF)
• Automotive Window Films
• Architectural Films
• Detailing Products

Strategic market expansions are another critical growth driver for XPEL. The company has been actively expanding its global footprint by establishing new distribution centers and service locations in key markets. This expansion strategy enables XPEL to tap into new customer segments and increase its market share. Key regions for expansion include North America, Europe, and Asia-Pacific, where the demand for automotive and architectural films is steadily growing.

Acquisitions have played a significant role in XPEL's growth, allowing the company to integrate complementary technologies and expand its market presence. These acquisitions have not only broadened XPEL's product portfolio but have also enhanced its operational efficiencies and market reach. Strategic acquisitions enable XPEL to:

• Enter new markets quickly
• Acquire new technologies
• Consolidate market share

XPEL's competitive advantages further solidify its position for sustained growth. These advantages include a strong brand reputation, a loyal customer base, and a robust distribution network. The company's reputation for high-quality products and excellent customer service has helped it build strong relationships with dealers and end-users alike.

To understand XPEL's strategic direction, refer to Mission Statement, Vision, & Core Values of XPEL, Inc. (XPEL).

While specific future revenue growth projections and earnings estimates were not available in the provided search results, XPEL's strategic initiatives and competitive advantages suggest a positive outlook. Investors should consult the company's official financial reports and investor presentations for detailed financial forecasts.