BWMX Stock Forecast & Price Target

Betterware de Mexico SAPI de CV is witnessing a positive outlook due to a robust projected EBITDA increase of 24.7% from prior projections, alongside significant revenue growth contributions from its JAFRA segment, which is achieving a compound annual growth rate (CAGR) of 18% in revenue and 23% in EBITDA since its acquisition in April 2022. The home organization category remains strong, with a 3.6% year-over-year increase in catalog pricing, reflecting effective pricing strategies and heightened demand across the Betterware segment. Additionally, the successful launch of operations in Ecuador and continued double-digit revenue growth in Guatemala positions the company for further expansion, bolstering its financial stability and growth trajectory in the Mexican market.

The analysis indicates a negative outlook for Betterware de Mexico SAPI's stock primarily due to a consistent decline in SKU counts, with December's total of 340 representing a 7.6% year-over-year decrease, marking the fourth decline in the past five months. Additionally, the significant drop in discounted products, with only 88 SKUs on sale, reflects a 690 basis point decline year-over-year that may hint at reduced sales activity and inventory challenges. Further compounding these issues, plant utilization rates have fallen to 50% in Brazil and 65% in Mexico, which may undermine operational efficiency and indicate potential difficulties in meeting revenue targets.