DTC - Solo Brands: I'm Expecting Further Financial Turbulence In 2024

2024-02-14 16:45:25 ET

Summary

• Solo Brands sells through four current brands, including Solo Stove, Oru Kayak, Chubbies, and Isle, as well as the TerraFlame brand acquired in 2023, merged with Solo Stove.
• The historical growth has mostly been done with M&A. I estimate modest future growth, as the current balance sheet doesn't leave sustainable space for further acquisitions.
• The company guides for a weak Q4, and I estimate the challenges to continue in 2024 as macroeconomic pressures seem to persist.
• The current valuation doesn't leave a very good amount of upside for the risk that investors are taking in the stock, in my view.

Solo Brands, Inc. ( DTC ) sells through five current brands — Solo Stove that sells camp stoves and fire pits, Oru Kayak that sells folding kayaks as well as kayaking accessories, Chubbies that sells men's shorts and swimming trunks, Isle that sells affordable paddle boats, as well as the TerraFlame brand acquired in 2023 that sells small indoor fireplaces....

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