Full Disclosure: I own 105 shares @ $22.61 and I am a novice investor. I will probably take profits at $30. This is my first discussion post to the sub.
I believe that BBW is an overlooked gem in the retail sector. While it may not grab headlines like some tech giants, the fundamentals of this company make a compelling case for investment, particularly in light of its healthy balance sheet. Build-A-Bear Workshop achieved a commendable return on assets (ROA) of 14.6%, showing its operational effectiveness. The total debt/equity ratio of 70.2% is within reasonable bounds, indicating that the company has a manageable level of debt relative to its equity (learning from how it was previously run). The company's cash reserves are notable, with $24.8 million reported in their last quarterly report. This liquidity provides Build-A-Bear Workshop with flexibility and resilience, allowing it to tackle challenges ahead, like it's ongoing lawsuit with squishmellow. I believe this is why the stock isn't currently sitting higher.
This isn't the brand that you knew in 2007. They have done well to expand on their online store, as COVID forced them to adapt. And for what its worth, I recently went to my local mall that was dead – but the Build-A-Bear store was packed.
TLDR: Good ROA, a healthy debt and cash on hand shows that $BBW presents itself as an attractive investment opportunity.
