Revealing a significant insider sell on October 17, George Carrara, Board Member at Build-A-Bear Workshop BBW, as per the latest SEC filing.

What Happened: Carrara opted to sell 2,500 shares of Build-A-Bear Workshop, according to a Form 4 filing with the U.S. Securities and Exchange Commission on Thursday. The transaction’s total worth stands at $90,675.

Monitoring the market, Build-A-Bear Workshop‘s shares down by 0.0% at $37.76 during Friday’s morning.

About Build-A-Bear Workshop

Build-A-Bear Workshop Inc is a U.S.-based specialty retailer of customized stuffed animals and related products. The company operates through three segments. Its Direct-to-consumer segment with key revenue, includes the operating activities of corporately-managed locations and other retail delivery operations in the U.S., Canada, China, Denmark, Ireland, and the U.K., including the company’s e-commerce sites and temporary stores. The international franchising segment includes the licensing activities of the company’s franchise agreements with store locations in Europe, Asia, Australia, the Middle East, and Africa. The commercial segment includes the transactions with other businesses, mainly comprised of licensing the intellectual properties for third-party use and wholesale activities.

Build-A-Bear Workshop’s Economic Impact: An Analysis

Revenue Growth: Build-A-Bear Workshop’s revenue growth over a period of 3 months has been noteworthy. As of 31 July, 2024, the company achieved a revenue growth rate of approximately 2.36%. This indicates a substantial increase in the company’s top-line earnings. When compared to others in the Consumer Discretionary sector, the company excelled with a growth rate higher than the average among peers.

Evaluating Earnings Performance:

• Gross Margin: The company maintains a high gross margin of 54.18%, indicating strong cost management and profitability compared to its peers.

• Earnings per Share (EPS): Build-A-Bear Workshop’s EPS is below the industry average. The company faced challenges with a current EPS of 0.64. This suggests a potential decline in earnings.

Debt Management: With a below-average debt-to-equity ratio of 0.81, Build-A-Bear Workshop adopts a prudent financial strategy, indicating a balanced approach to debt management.

Assessing Valuation Metrics:

• Price to Earnings (P/E) Ratio: The Price to Earnings ratio of 10.67 is lower than the industry average, indicating potential undervaluation for the stock.

• Price to Sales (P/S) Ratio: A higher-than-average P/S ratio of 1.1 suggests overvaluation in the eyes of investors, considering sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): The company’s EV/EBITDA ratio of 7.69 trails industry averages, indicating a potential disparity in market valuation that could be advantageous for investors.

Market Capitalization: With restricted market capitalization, the company is positioned below industry averages. This reflects a smaller scale relative to peers.

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Understanding the Significance of Insider Transactions

Insider transactions contribute to decision-making but should be supplemented by a comprehensive investment analysis.

In legal terms, an “insider” refers to any officer, director, or beneficial owner of more than ten percent of a company’s equity securities registered under Section 12 of the Securities Exchange Act of 1934. This can include executives in the c-suite and large hedge funds. These insiders are required to let the public know of their transactions via a Form 4 filing, which must be filed within two business days of the transaction.

When a company insider makes a new purchase, that is an indication that they expect the stock to rise.

Insider sells, on the other hand, can be made for a variety of reasons, and may not necessarily mean that the seller thinks the stock will go down.

Breaking Down the Significance of Transaction Codes

For investors, a primary focus lies on transactions occurring in the open market, as indicated in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S signifies a sale. Transaction code C signals the conversion of an option, and transaction code A denotes a grant, award, or other acquisition of securities from the company.

Check Out The Full List Of Build-A-Bear Workshop’s Insider Trades.

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This article was generated by Benzinga’s automated content engine and reviewed by an editor.