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1. Company Snapshot

1.a. Company Description

Caesarstone Ltd., together with its subsidiaries, develops, manufactures, and markets engineered quartz and other surfaces under the Caesarstone brand in the United States, Australia, Canada, Latin America, Asia, Israel, Europe, the Middle East, and Africa.The company's engineered quartz slabs are primarily used as indoor and outdoor kitchen countertops in the renovation and remodeling construction end markets.Its products are also used in other applications, such as vanity tops, wall panels, back splashes, floor tiles, stairs, furniture, and other interior and exterior surfaces that are used in various residential and non-residential applications.


The company also offers porcelain products under the Lioli brand for flooring and cladding applications, as well as resells natural stones, various ancillary fabrication tools, and installation accessories; and sells sinks and materials.It sells its products directly to fabricators, sub-distributors, and resellers; and through direct sales force and indirect network of independent distributors.The company was formerly known as Caesarstone Sdot Yam Ltd.


and changed its name to Caesarstone Ltd.in June 2016.Caesarstone Ltd.


was founded in 1987 and is headquartered in Menashe, Israel.

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1.b. Last Insights on CSTE

Caesarstone Ltd.'s recent stock performance was negatively driven by the company's Q4 2024 earnings miss, where revenue declined 12.4% year-over-year to $244.3 million, and net income plummeted 34.4% to $21.6 million. CEO Yos Shiran attributed the decline to supply chain disruptions and lower demand in the North American market. The company also reduced its 2025 guidance, citing softer demand and higher material costs. Furthermore, Caesarstone's share buyback program, announced in Q4 2024, is a positive signal for shareholders, indicating the company's commitment to returning value to its investors.

1.c. Company Highlights

2. Caesarstone's Q3 2025 Earnings: Navigating Transformation and Challenges

Caesarstone reported global revenue of $102.1 million for Q3 2025, a 5.7% decrease from the prior year quarter on a constant currency basis. The gross margin stood at 17.3%, down from 19.9% in the prior year quarter. The company's adjusted EBITDA was a loss of $7.9 million, and operating expenses were $33.7 million. The actual EPS came out at '-0.4', slightly missing estimates at '-0.38'. The revenue decline and margin compression were expected as the company continues to transform its business model.

Publication Date: Nov -19

📋 Highlights
  • Business Model Restructuring:: Caesarstone is shifting toward innovation, product development, and marketing while outsourcing production, closing its Bar-Lev facility for $22M annualized savings ($85M+ total since 2023).
  • Q3 Financial Decline:: Revenue dropped 5.7% to $102.1M, with gross margin falling to 17.3% from 19.9%, and adjusted EBITDA at a $7.9M loss.
  • Bar-Lev Closure Impact:: Facility shutdown incurs $40–45M non-cash impairment and $4–8M cash costs, though sublease options are being explored.
  • Legal and Tariff Risks:: $46M provision for silica lawsuits and monitoring U.S. tariff risks, including an ITC petition affecting quartz imports.
  • Liquidity and Future Outlook:: $69.3M cash and $66.7M net cash position, with CEO targeting positive adjusted EBITDA by Q3 2026 post-structural changes.

Business Transformation and Cost Savings

The company's decision to close its Bar-Lev manufacturing facility is expected to yield annualized cash savings of $22 million and total savings of over $85 million since 2023. This strategic move is part of Caesarstone's broader efforts to optimize production, increase competitiveness, and focus on innovation, product development, and marketing. The company is also outsourcing production to global partners, which is anticipated to drive long-term growth.

Challenges and Risks

The Bar-Lev facility closure will result in non-cash impairment expenses of $40-45 million and cash costs of $4-8 million. Additionally, Caesarstone is monitoring the impact of U.S. tariffs and a petition filed with the ITC alleging injury to the U.S. domestic quartz industry. The company has also recorded a $46 million provision for silica-related lawsuits. Despite these challenges, Caesarstone sees stabilizing trends in its top line and is proceeding with its structural transformation.

Valuation and Outlook

Analysts estimate next year's revenue growth at 1.6%. The current valuation metrics indicate that the company has a 'P/S Ratio' of 0.08 and an 'EV/EBITDA' of -2.18. These metrics suggest that the market is pricing in the challenges faced by the company. Caesarstone expects to reach positive adjusted EBITDA in Q3 2026, driven by its cost-saving initiatives and business transformation. The company's commitment to sustainable, profitable growth is evident in its efforts to reposition itself for long-term success.

3. NewsRoom

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Caesarstone Ltd. (CSTE) Q3 2025 Earnings Call Transcript

Nov -12

Source: seekingalpha.com

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Caesarstone Ltd. (CSTE) Q2 2025 Earnings Call Transcript

Aug -07

Source: seekingalpha.com

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Caesarstone Ltd. (CSTE) Q1 2025 Earnings Call Transcript

May -10

Source: seekingalpha.com

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Caesarstone Ltd. (CSTE) Q4 2024 Earnings Call Transcript

Mar -05

Source: seekingalpha.com

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Caesarstone Ltd. (CSTE) Q3 2024 Earnings Call Transcript

Nov -13

Source: seekingalpha.com

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Caesarstone Ltd. (CSTE) Q2 2024 Earnings Call Transcript

Aug -07

Source: seekingalpha.com

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CaesarStone (CSTE) Reports Q2 Loss, Lags Revenue Estimates

Aug -07

Source: zacks.com

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Caesarstone to Attend Stifel 2024 Cross Sector Insight Conference

May -30

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.97%)

6. Segments

Engineered Quartz Surfaces

Expected Growth: 8.97%

Caesarstone's Engineered Quartz Surfaces growth is driven by increasing demand for premium, low-maintenance, and durable countertops in the residential and commercial construction markets. Additionally, the company's strong brand recognition, expanding distribution network, and innovative product offerings contribute to its growth. Furthermore, the trend towards urbanization and rising disposable incomes in emerging markets also support the segment's growth.

7. Detailed Products

Quartz Countertops

Caesarstone's quartz countertops are made from a combination of quartz mineral and resin, offering a durable and low-maintenance surface for kitchens, bathrooms, and other areas.

Surfaces for Walls and Floors

Caesarstone's surfaces for walls and floors are designed to provide a seamless look, offering a range of colors and patterns to complement any interior design.

Outdoor Kitchens and Furniture

Caesarstone's outdoor products are designed to withstand the elements, offering a range of durable and stylish solutions for outdoor kitchens, bars, and furniture.

Interior Design Elements

Caesarstone's interior design elements, such as fireplaces and shower walls, offer a unique and sophisticated touch to any room.

8. Caesarstone Ltd.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Caesarstone Ltd. faces moderate threat from substitutes, as there are alternative materials available in the market, such as granite, marble, and laminate. However, Caesarstone's unique products and brand reputation help to mitigate this threat.

Bargaining Power Of Customers

Caesarstone Ltd. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's strong brand reputation and high-quality products make it difficult for customers to negotiate prices.

Bargaining Power Of Suppliers

Caesarstone Ltd. relies on a few key suppliers for raw materials, which gives them some bargaining power. However, the company's large scale of operations and long-term contracts help to mitigate this threat.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the quartz surface manufacturing industry. Caesarstone Ltd. has a strong brand reputation, patented technology, and a large distribution network, making it difficult for new entrants to compete.

Intensity Of Rivalry

The quartz surface manufacturing industry is highly competitive, with several established players competing for market share. Caesarstone Ltd. faces intense competition from companies such as Silestone, Cambria, and HanStone.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 9.18%
Debt Cost 3.95%
Equity Weight 90.82%
Equity Cost 5.10%
WACC 4.99%
Leverage 10.11%

11. Quality Control: Caesarstone Ltd. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Placoplatre

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Growth: 0.3

Quality: 6.5

Yield: 5.6

Momentum: 6.5

Volatility: 7.7

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Tarkett

A-Score: 5.1/10

Value: 8.1

Growth: 2.9

Quality: 2.2

Yield: 0.0

Momentum: 9.5

Volatility: 7.7

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LU-VE

A-Score: 4.9/10

Value: 3.7

Growth: 6.7

Quality: 4.2

Yield: 2.5

Momentum: 7.0

Volatility: 5.3

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Schweiter Technologies

A-Score: 4.8/10

Value: 7.8

Growth: 2.2

Quality: 4.4

Yield: 6.9

Momentum: 1.5

Volatility: 6.0

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Arbonia

A-Score: 3.4/10

Value: 4.5

Growth: 1.0

Quality: 5.7

Yield: 6.9

Momentum: 0.0

Volatility: 2.3

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Caesarstone

A-Score: 2.8/10

Value: 10.0

Growth: 1.4

Quality: 3.5

Yield: 1.2

Momentum: 0.0

Volatility: 0.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

1.82$

Current Price

1.82$

Potential

-0.00%

Expected Cash-Flows