Newegg Commerce, Inc.

Where It Passes

Where It Falls Short

• Valuation0% pass✓ 6✗ 22▾

  No clean pass — all 13 investors flag at least one valuation criterion

  Price / Book Value per Share1.2x

  ✓Dreman< 1.2x✓Templeton< 1.5x✗SchlossP/B <= 0.80x (app cutoff)

  Price / 3-yr avg EPS

  ✗Graham<= 15x

  Price-to-Book Ratio1.2x

  ✓Graham<= 1.5x

  P/E x P/B

  ✗Graham<= 22.5

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  EBIT / Enterprise Value-11.7%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=-11.7%, ROC=-23.1%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Price / EPS

  ✗Dreman< 12x✗Templeton< 12x (fixed ceiling; proxy for the market's cheapest 40%)

  Price / (CFO / Shares)N/A (negative CFPS)

  ✗Dreman< 8x

  Valuation ReasonablenessOE Yield=0.0%

  ✗MungerP/E < 25 or Owner Earnings Yield > 5%

  P/E or FCF YieldFCF Yield=-16.0%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  P/B or P/E vs. Historical AverageP/B=1.2x

  ✓MarksP/E < 15 or P/B < 2.0

  Discount to Intrinsic Value

  ✗Marks>= 20% below intrinsic value

  Price / FCF per ShareN/A (negative FCF)

  ✗Ackman<= 25

  Price vs. Trailing Low239% of trailing low ($3.70)

  ✗Templeton<= 120% of trailing low (certified split-adjusted live window)

  Net income / market capitalization-2.64%; #3644/6340 (top 57.5%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Positive book equity / market capitalization+0.8678; #1755/6449 (top 27.2%)

  ✓AsnessTop 30% of eligible cross-section

  Price / Diluted EPS

  ✗NeffP/E <= 15x (app proxy for a P/E 40%-60% below the market)

  (EPS CAGR % + Dividend Yield %) / P/E

  ✗Neff> 0.7 (Neff's published traditional edge)

  Price / Tangible Book Value per Share1.15x

  ✗SchlossP/TBV <= 1.00x (app cutoff)

  Book Value per Share Change

  ✗SchlossLatest BVPS >= earliest BVPS over >= 3 years (app rule)

  Revenue / market capitalization+7.7995; #386/5247 (top 7.4%)

  ✓OshaughnessyTop 10% of eligible cross-section

  (Operating cash flow - capex) / market capitalization-16.02%; #3428/4519 (top 75.9%)

  ✗OshaughnessyTop 10% of eligible cross-section

  Trailing six-month price return through the evaluation date-75.78%; #5762/6202 (top 92.9%)

  ✗OshaughnessyTop 10% of eligible cross-section
• Cash Flow0% pass✗ 12▾

  All 10 investors flag NEGG's cash flow

  Free Cash Flow Proxy$0.0M

  ✗BuffettPositive and growing

  FCF Positive and Growing$-29.7M

  ✗LynchPositive and growing

  Operating Cash Flow$-27.0M

  ✗PiotroskiCFO > 0

  (CFO / Total Assets) vs ROACFO/Assets=-5.75%, ROA=-1.04%

  ✗PiotroskiCFO/Assets > ROA

  Price / (CFO / Shares)N/A (negative CFPS)

  ✗Dreman< 8x

  P/E or FCF YieldFCF Yield=-16.0%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  FCF Positive2/7 years FCF positive

  ✗MarksPositive FCF in majority of recent years

  (OCF - CapEx) / Market Cap-16.0%

  ✗Ackman>= 4%

  Price / FCF per ShareN/A (negative FCF)

  ✗Ackman<= 25

  Positive Operating Cash Flow frequency4/16 years positive

  ✗SleepPositive OCF in >= 70% of available years

  Operating Cash Flow - Capital Expenditures$-29.7M

  ✗Neff> $0 (app proxy for a strong fundamental case)

  (Operating cash flow - capex) / market capitalization-16.02%; #3428/4519 (top 75.9%)

  ✗OshaughnessyTop 10% of eligible cross-section
• Growth0% pass✗ 13▾

  All 8 investors flag NEGG's growth

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  Inventory Growth vs Revenue GrowthInv: 68.7% vs Rev: 16.9%

  ✗LynchInventory growth < Revenue growth

  EPS Growth Direction

  ✗DremanPositive over recent years

  EPS CAGR

  ✗Dreman> 5% annualized

  Positive Net Income Frequency6/16 years positive

  ✗MarksPositive net income in >= 7 of last 10 years

  3yr Median Revenue Growth-13.0%

  ✗Ackman>= 5%

  Positive EPS Growth Frequency

  ✗AckmanPositive EPS growth in >= 3 of last 5 years

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Revenue growth vs. gross and operating margin trendgross margin 11.2% -> 11.7%, operating margin -4.7% -> -0.7%

  ✗SleepRevenue rising; gross margin flat or falling; operating margin holding

  5-year Revenue CAGR-7.3%

  ✗SleepCAGR > 7%

  3-5 Year Diluted EPS CAGR-36.3% over 4 years

  ✗Neff7%-20% annualized
• Profitability6% pass✓ 4✗ 31▾

  15 of 16 flag NEGG's profitability — Graham, Buffett, Lynch +12 more

  Positive EPS (10 years)7/17 years positive

  ✗GrahamPositive EPS every year for 10 years

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Net Income Positive (10+ years)6/17 years positive

  ✗BuffettPositive every year for 10+ years

  ROE (up to 5-year arithmetic mean)-21.3%

  ✗Buffett> 15% arithmetic mean (app rule)

  Operating Margin (10-yr trend)-0.7% (latest)

  ✗BuffettStable or rising over 10 years

  Free Cash Flow Proxy$0.0M

  ✗BuffettPositive and growing

  Earnings Variance (10-yr CoV)

  ✗BuffettCoV < 0.3

  Retained Earnings Effectiveness

  ✗Buffett$1 retained -> > $1 market value created

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  ROE-3.0%

  ✗Lynch> 15%

  EBIT / Enterprise Value-11.7%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=-11.7%, ROC=-23.1%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Net Income / Total Assets-1.04%

  ✗PiotroskiROA > 0

  ROA Change YoY-10.64% -> -1.04% (delta: +9.60%)

  ✓PiotroskiCurrent ROA > Prior ROA

  (CFO / Total Assets) vs ROACFO/Assets=-5.75%, ROA=-1.04%

  ✗PiotroskiCFO/Assets > ROA

  Gross Margin Change YoY10.6% -> 11.7%

  ✓PiotroskiImproved YoY

  Pre-Tax Income / Revenue-0.2%

  ✗Dreman>= 8%

  Net Income / Shareholders' Equity-3.0%

  ✗Dreman> 12%

  Margin of SafetyP/B=1.2x

  ✓PabraiP/B < 1.5 or P/E < 15

  Return on Equity-29.8% (3-yr avg)

  ✗AkreROE > 20% (3-year avg)

  Discount to Intrinsic Value

  ✗Marks>= 20% below intrinsic value

  Positive Net Income Frequency6/16 years positive

  ✗MarksPositive net income in >= 7 of last 10 years

  Operating Income / Revenue-0.7%

  ✗Ackman>= 15%

  Net Income / Shareholders Equity-3.0%

  ✗Ackman>= 15%

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Operating Margin Trend-4.7% (2023) -> -0.7% (2025)

  ✓TempletonNon-negative operating-margin trend over 3 years

  Revenue growth vs. gross and operating margin trendgross margin 11.2% -> 11.7%, operating margin -4.7% -> -0.7%

  ✗SleepRevenue rising; gross margin flat or falling; operating margin holding

  Net income / market capitalization-2.64%; #3644/6340 (top 57.5%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Gross profit / total assets+35.93%; #1130/3702 (top 30.5%)

  ✗AsnessTop 30% of eligible cross-section

  Net income / positive book equity-3.04%; #3109/5226 (top 59.5%)

  ✗AsnessTop 30% of eligible cross-section

  Negative 5-year standard deviation of ROA-0.0692; #3000/5884 (top 51.0%)

  ✗AsnessTop 30% of eligible cross-section

  3-5 Year Diluted EPS CAGR-36.3% over 4 years

  ✗Neff7%-20% annualized

  Positive Diluted-EPS Years2/10 years positive

  ✗Schloss>= 70% positive over 5-10 observed years (app rule)
• Efficiency13% pass✓ 2✗ 9▾

  7 of 8 flag NEGG's efficiency — Graham, Buffett, Greenblatt +4 more

  Current Ratio1.41

  ✗Graham>= 2.0

  ROIC (3-5 yr avg)-115.3%

  ✗Buffett> 10%

  ROIC - WACC-125.3%

  ✗BuffettPositive (WACC = 10%)

  EBIT / (NWC + Net Fixed Assets)-23.1%

  ✗Greenblatt> 25%

  Current Ratio Change YoY1.16 -> 1.41

  ✓PiotroskiIncreased YoY

  Revenue / Total Assets Change YoY3.03x -> 3.08x

  ✓PiotroskiImproved YoY

  Current Assets / Current Liabilities1.41

  ✗Dreman> 1.5

  Return on Invested Capital-4.6%

  ✗Munger> 15%

  ROIC (high and growing)FY2023: ROIC=-42.9%; FY2024: ROIC=-36.8%; FY2025: ROIC=-4.6%

  ✗AkreLatest 3 consecutive FYs: ROIC > 15% in each

  Reinvestment Rate x ROICN/A (non-positive net income)

  ✗AkreReinvestment Rate * ROIC > 10%

  ROIC (5-year)1/5 years above 12% (latest -4.6%)

  ✗SleepROIC > 12% in a majority of years
• Verdicts13% pass✓ 2✗ 14▾

  Split decision: 13 FAIL · 2 PASS · 1 NEUTRAL

  Overall verdict

  ✗GrahamFAIL (2/9)✗BuffettFAIL (0/9)✗LynchFAIL (1/7)✗GreenblattRank #2235✓PiotroskiPASS (F-Score 5)✗DremanFAIL (2/11)✗MungerFAIL (1/4)✗PabraiFAIL (1/3)✗AkreFAIL (2/6)✗MarksFAIL (1/5)✗AckmanFAIL (2/9)✓TempletonPASS (4/8)✗SleepFAIL (1/6)✗AsnessFAIL (Rank #1553/2370 (Top 65.5%))✗NeffFAIL (0/6)✗SchlossFAIL (1/7)•OshaughnessyNEUTRAL (Not ranked)
• Debt & Leverage50% pass✓ 9✗ 6▾

  6 of 12 pass — Graham, Buffett, Lynch +3 more object

  LT Debt vs Net Current Assets

  ✗GrahamLT Debt <= Net Current Assets

  Debt/Equity & Interest CoverageD/E: 0.03, IC: -9.5x

  ✗BuffettD/E < 0.5 AND Interest Coverage > 5x

  Total Debt / Equity0.03

  ✓Lynch< 0.33

  Cash - Long-term Debt

  ✗LynchPositive preferred

  LT Debt / Total Assets Change0.00% -> 0.00%

  ✓PiotroskiDecreased YoY

  Current Assets / Current Liabilities1.41

  ✗Dreman> 1.5✗SchlossCurrent ratio >= 1.50x (app cutoff)

  Total Debt / Shareholders' Equity0.03

  ✓Dreman< 0.8✓Templeton< 1.0 (fixed cap; proxy for below-sector-median leverage)✓SchlossD/E < 1.00x

  Debt Levels0.03

  ✓MungerDebt/Equity < 0.5✓AkreDebt/Equity < 0.3

  Interest Coverage & Debt/EBITDAIC=-9.5x, D/EBITDA=N/A

  ✗MarksInterest Coverage > 3x; Debt/EBITDA < 4x

  Total Debt / Shareholders Equity0.03

  ✓Ackman<= 1.0

  Negative debt-to-equity (higher means less debt)-0.0255; #807/4210 (top 19.2%)

  ✓AsnessTop 30% of eligible cross-section