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On Friday, DA Davidson reaffirmed their Neutral stance on 1-800-FLOWERS.COM (NASDAQ:FLWS), with a consistent price target of $7.50. The stock currently trades at $5.89, near its 52-week low of $6.01, having declined 40% over the past year. Analyst Linda Bolton Weiser provided insights after virtually spending a day with the company’s management, discussing various aspects of the business including tariff exposure, cost trends, the consumer environment, and issues with the order management system that arose in the second fiscal quarter of 2025. According to InvestingPro, the company maintains a Fair financial health score, with 13 key investment insights available for subscribers.
Weiser highlighted concerns about ongoing year-over-year sales declines, with InvestingPro data showing revenue declined 7.84% in the last twelve months to $1.76 billion. The analyst suggests that a significant improvement in consumer confidence, potentially into the 80s, would be necessary for 1-800-FLOWERS.COM to kickstart its revenue growth again. The analyst’s remarks come in the context of a broader market downturn, where the company’s shares have fallen by 29% amidst a 10% market correction.
The price target of $7.50 set by DA Davidson is based on a valuation of five times the company’s estimated calendar year 2026 EBITDA of $96 million. The company currently trades at an EV/EBITDA multiple of 11.25x, with analyst targets ranging from $7.50 to $12.00. However, Weiser noted that this target is subject to review following the release of the company’s third fiscal quarter 2025 results, due in approximately 48 days, indicating a potential reassessment of the company’s future financial outlook.
The analyst’s comments reflect a cautious approach to the stock, acknowledging the challenges faced by 1-800-FLOWERS.COM in a difficult economic climate. Despite the company’s recent struggles, the Neutral rating indicates that DA Davidson is awaiting further data before making any adjustments to their valuation and recommendations for the stock.
Investors and stakeholders are now looking forward to the forthcoming F3Q25 earnings report, which will provide additional clarity on the company’s performance and may influence future ratings and price targets.
In other recent news, 1-800-FLOWERS.COM reported a challenging second quarter for fiscal year 2025, with earnings per share and revenue falling short of expectations. The company posted an EPS of $1.08, missing the forecasted $1.20, and revenue reached $775.5 million, below the anticipated $801.9 million. This shortfall was partly attributed to a $20 million impact from a systems issue in their food business. Consequently, 1-800-FLOWERS.COM reduced its full-year 2025 EBITDA guidance by 22%, with the revised midpoint now at $70 million. Despite these setbacks, DA Davidson maintained a Neutral rating on the company with a price target of $7.50.
In a strategic move to enhance delivery logistics, 1-800-FLOWERS.COM partnered with Uber Technologies (NYSE:UBER) to use Uber Direct for on-demand delivery services. This collaboration is designed to assist local florists in the BloomNet network, particularly during peak demand periods like Valentine’s Day. The integration allows florists to dynamically dispatch, track, and fulfill same-day floral deliveries, which is crucial for last-minute shoppers. This partnership reflects the company’s commitment to leveraging technology for improved delivery efficiency.
Additionally, the company continues to face challenges in the e-commerce and corporate gifting sectors, with revenue declines of 8.3% and 17.5%, respectively. Despite these hurdles, 1-800-FLOWERS.COM maintained a steady gross margin of 43.3% and reduced its net debt to $160 million. Looking ahead, the company plans to focus on cost reduction and explore potential mergers and acquisitions to enhance growth prospects.
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