Newegg Commerce

NEGG

Specialty Retail · Consumer Cyclical

Price

$12.99

-0.94 (-6.75%)

Market Cap

$272.4M

Exchange

NASDAQ

Winston Score

Winston is worried

Weak fundamentals across most pillars.

Share count falling — buybacks

−6.9% over 4y

The company has reduced its share count over this period, returning value to shareholders through buybacks.

Diluted shares outstanding: 21.6M (2021) → 20.1M (2025)

Newegg Commerce is an online retailer that sells computer parts, electronics, and tech accessories. Its main customers are PC builders, gamers, and tech enthusiasts who shop for items like graphics cards, processors, and laptops. Newegg operates primarily in North America but also has some international presence, and it is one of the more recognized names in the specialty tech retail space.

Newegg makes money by selling products directly to consumers and through a third-party marketplace where other sellers pay fees to list their items on the site. The company is relatively small with a market cap around $400 million, and its thin gross margins of about 12% leave little room for error. The biggest risk Newegg faces is intense competition from Amazon and other large retailers that can offer similar products at lower prices with faster shipping, which makes it hard for Newegg to grow profitably.

Winston Score History

Score breakdown

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Quality

Gross Margin

11.5%

Thin — 11.5% gross margin

Operating Margin

-1.1%

Losing money on operations — -1.1%

ROCE

-2.3%

Weak — -2.3% return on capital

Negative ROIC means the business is losing money on every dollar invested in it.

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Growth

Sales YoY

-5.7%

Shrinking sales (-5.7% YoY)

EPS YoY

N/A

—

Data not available

EPS Consistency

0/8 quarters

Earnings rarely grow — volatile business

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Cash Flow

Cash Conversion

N/A

—

Data not available

FCF Margin

0.7%

Thin free cash flow (0.7%)

FCF margin between 0% and 10%. Some cash from sales, but not a lot.

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Stability

Debt / Equity

0.04

Conservative — low debt load (0.04)

Interest Cover

N/A

Data not available

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Valuation

P/E Ratio (TTM)

61.2x

Expensive — P/E 61.2

P/E over 35. The market is pricing in heavy, sustained growth.

P/E vs Forward

N/A

not available

Data not available

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Dividends

Not applicable for this business.

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