GICS Sector : Consumer Cyclical
Aterian, Inc., together with its subsidiaries, operates as a technology-enabled consumer products company in North America and internationally.The company provides Artificial Intelligence Marketplace e-Commerce Engine, a software technology platform, which uses machine learning, natural language processing, and data analytics to design, develop, market, and sell products.Its platform offers home and kitchen appliances; kitchenware; heating, cooling, and health and beauty products; and air quality appliances, such as dehumidifiers, humidifiers, and air conditioners under the hOmeLabs, Vremi, Squatty Potty, Xtava, RIF6, Aussie Health, Holonix, Truweo, Mueller, Pursteam, Pohl and Schmitt, Healing Solutions, Photo Paper Direct, and Spiralizer brands.
Aterian reported a net revenue decline of 27.5% to $19 million in Q3 2025, compared to $26.2 million in the year-ago quarter, primarily due to reduced consumer demand and increased pricing to mitigate the impact of tariffs on cost of goods sold. The adjusted EBITDA loss narrowed to $400,000 from a loss of $2.2 million in Q2. The company's actual EPS came out at -$0.28, beating estimates of -$0.63. The contribution margin improved by over 700 basis points to 15%, driven by cost reductions and pricing adjustments.
Publication Date: Nov -25
Aterian implemented an aggressive strategy to mitigate the impact of tariffs, including cost reductions, resourcing, product launch strategy, and pricing adjustments. The company achieved approximately $5.5 million of the $5 to $6 million targeted fixed cost savings, primarily through headcount reductions and vendor savings. The company also leveraged AI to enhance productivity, recognizing a 30% improvement in service level performance and a 20% improvement in talk time, as noted by Arturo Rodriguez, "We're confident in our ability to navigate the ongoing tariff environment through targeted cost savings, US-sourced product launches, focused marketing, and disciplined cash management."
Amazon remains Aterian's largest channel, accounting for over 95% of its revenue in the quarter. The company is launching products on other channels, like Home Depot, Best Buy, and Target, but these are still in the early stages. The launch revenue for new products is muted due to the wholesale pricing model and the impact of tariffs on marketing strategy. However, the company is seeing positive customer feedback and expects the numbers to grow in Q2 2026.
Aterian's current valuation metrics indicate a P/S Ratio of 0.09 and an EV/EBITDA of 0.43. Analysts estimate next year's revenue growth at 4.0%. Given the company's efforts to navigate the tariff environment and improve profitability, the current valuation appears to be reasonable. However, investors should continue to monitor the company's progress in executing its strategy and achieving sustainable top-line growth.
Aterian remains focused on driving profitable growth, maintaining cost discipline, and protecting liquidity as it navigates the current environment. The company plans to restart Asian-sourced product launches in 2026 and continue to expand its consumables sourced in the US. With a cash balance of approximately $7.6 million at 09/30/2025, the company is well-positioned to execute its strategy and drive growth in the coming quarters.
Genesys Cloud Enables Aterian to Deepen Customer Loyalty Across Global Marketplaces and Reduce Costs by 65%
Nov -19
Aterian, Inc. (ATER) Q3 2025 Earnings Call Transcript
Nov -14
Aterian Reports 2025 Third Quarter Financial Results and Reiterates Guidance
Nov -13
Aterian Sets Date for Third Quarter 2025 Earnings Announcement & Investor Conference Call
Oct -30
Aterian Announces Availability of hOmeLabs Dehumidifiers on HomeDepot.com
Oct -29
Aterian Enters Functional Beauty Market with Launch of Tallow Skin Care Line Under Healing Solutions® Brand
Oct -23
Aterian Launches Products on BedBathandBeyond.Com
Oct -14
Aterian Receives 2025 Genesys Orchestrators Innovation Award
Sep -10
Aterian's Investment Property segment is poised for growth driven by increasing demand for rental properties and potential long-term appreciation in property values, fueled by a strong economy and limited housing supply.
Aterian, Inc.'s property sales are driven by increasing demand for e-commerce enabled real estate services, growing online marketplaces, and strategic partnerships in the proptech industry.
Aterian's leasing and renting services are poised for growth driven by increasing consumer preference for flexible payment plans and access to various products, particularly among millennials and Gen Z. This shift towards sharing economy and sustainable consumption habits will fuel the demand for Aterian's services.
The subsequent valuation of real estate is driven by increasing demand for accurate property valuations, advancements in property technology, and growing adoption of data-driven approaches in the real estate industry.
Aterian's focus on niche markets with high growth potential, coupled with its technology-enabled approach to building, acquiring, and partnering with e-commerce brands, positions the company for significant growth.
Aterian's 'Other' segment is expected to grow driven by increasing demand for licensing and royalties, expansion into new markets, and strategic partnerships.
Pet Zone is a brand that offers a range of pet-related products, including pet feeders, pet toys, and pet accessories.
Home and Kitchen is a brand that offers a range of home and kitchen products, including cookware, cutlery, and home decor items.
Healifty is a brand that offers a range of health and wellness products, including fitness equipment, yoga mats, and wellness supplements.
Rokono is a brand that offers a range of outdoor and sporting goods, including camping gear, hiking equipment, and athletic wear.
E-commerce Enablement is a service that helps other companies to establish and grow their e-commerce presence.
Aterian, Inc. operates in a niche market with limited substitutes, but the threat of substitutes is still present due to the evolving nature of the industry.
Aterian, Inc. has a diverse customer base, which reduces the bargaining power of individual customers, giving the company an upper hand in negotiations.
Aterian, Inc. relies on a few key suppliers, which gives them some bargaining power, but the company's size and scale also give it negotiating power.
The industry in which Aterian, Inc. operates is relatively easy to enter, with low barriers to entry, making it vulnerable to new entrants.
Aterian, Inc. operates in a highly competitive industry with many established players, leading to intense rivalry and competition for market share.
| Value | |
|---|---|
| Debt Weight | 25.21% |
| Debt Cost | 13.80% |
| Equity Weight | 74.79% |
| Equity Cost | 13.80% |
| WACC | 13.80% |
| Leverage | 33.71% |
Value: 8.1
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