- 1847 Holdings scores success in its acquisition portfolio, as revenue soars and profits emerge; full year 2025 revenue of $48 million and $4.0 million in operating profits.
- Plan pending to acquire an unnamed California-based construction contractor specializing in wood framing and carpentry; could add an estimated $20 million to the revenue run rate.
- Shift to e-commerce sales channel with third-party logistics support at underperforming Wolo industrial horn and signal business; reverses decision to divest.
- Management focused on operational improvements and acquisition targets even as stock listing issues unfolded in late 2025; team’s single-mindedness could be important value driver for LBRA.
- Quotation on Over-the-Counter service under new symbol LBRA after stock delisted from New York Stock Exchange; court date pending as investor sues for damages during lapse in stock listing.
- Stock undervalued against backdrop of revenue expansion and flip to profitability, as well as growth potential in pending acquisition.
Latest News
The acquisition holding company, 1847 Holdings (LBRA: OTC/ID), is back with a new stock symbol and listing on the Over-the-Counter Market beginning in October 2025. Unable to remain in compliance with New York Stock Exchange minimum qualifications, the Company had been unceremoniously booted off the vaunted market four months earlier.
The stock symbol is not the only new development at this up-and-coming small business portfolio. In early March 2026, management disclosed a letter of intent to acquire an unnamed California-based construction contractor with a 40-year track record in specialty wood framing and carpentry.
The contractor recently repositioned its brand toward higher margin projects, experiencing a dip in sales and a temporary operating loss in 2025. Nonetheless, the shift in market priorities has allowed the acquisition target to build a $29 million contract backlog that should restore the historic revenue run rate. In the full year 2024, the contractor recorded $1.7 million in operating income on $19 million in revenue.
Existing Operations
The California contractor should fit well into 1847 Holdings’ portfolio of construction operations that represent the majority of the Company’s revenue and profits. Comprised of three separate businesses, the Company’s existing construction segment offers custom millwork, finished carpentry services and specialized cabinetry in both residential and office buildings. Customers are spread across Nevada, Idaho, southern Utah and northern Arizona. In the full year 2025, the Company reported total revenue of $47.1 million from its construction products and services segment.
CMD, Inc. is the shiniest jewel among the Company’s construction operations, contributing $40.5 million or 83.8% to total sales in the full year 2025, through a mix of products and services. Acquired in December 2024, annual comparisons are frustrated by uneven disclosures. In the trailing twelve months ending September 2024, the Company disclosed that CMD had achieved $33.1 million in total sales. Then in the final month of 2024, CMD reported $905,864 in total revenue, suggesting a seasonal slowdown due to winter or perhaps deal fatigue after the acquisition.
CMD’s gross profit margin also appears to have improved in the full year 2025 to 48.3% compared to 42.0% in that final month of 2024. Spending rates may also have decreased as operating expenses declined to 30.2% of sales compared to 46.4% in December month the previous year. Indeed, in 2025 CMD delivered $8.7 million to the Company’s operating income, making up for losses in the rest of the portfolio as well as the corporate burden.
Favorable demand conditions in the construction segment are likely to hold steady and that bodes well for future growth at CMD. In March 2026, Realtor.com reported that by the end of 2025, there was a housing supply gap in the U.S. exceeding four million houses. The Western U.S., where CMD operations, accounted for approximately 660,000 needed homes. Population increases, underbuilding and high prices are contributing to the tight market.
Harvest now? Hold for income?
Success at CMD has given management the enviable dilemma of 1) keeping the profitable operation to plump up the portfolio’s bottom-line or 2) divesting CMD at a favorable selling price to harvest a return on investment. In our recent conversations management suggested divestiture might be preferred for the right price. Proceeds could be used to reduce leverage as well as finance future deals.
1847 Holdings is a self-described ‘acquisition holding company’. Nonetheless, investors must not lose sight of the likelihood that an operation will be divested at some point. Sale of CMD at a favorable price would be the Company’s second major portfolio success following the sale of High Mountain Door & Trim in September 2024.
Smart Up or Scuttle?
Not all acquisitions result in lucrative divestitures. By early-2025, management was unfortunately getting frustrated by poor performance at Wolo, the Company’s industrial horn and signal business originally acquired in 2021. Wolo was put on the auction block and reported as a discontinued operation beginning with the quarter ending March 2025.
Nonetheless, flexibility appears be a watch word at 1847 Holdings. As the year progressed, the team took a second look at Wolo’s situation, making a dramatic decision to give its horns another toot. There has been a refocus in the e-commerce channel and a shift to third-party logistics. This model can be executed with a smaller staff and contractual arrangements help cap expenses. At the close of 2025, Wolo was included again in continuing operations.
Wolo recorded a loss of $712,043 on $1.2 million in total revenue in the first nine months ending September 2025. The Company used $11,770 in cash resources to support the old Wolo operation. In the final quarter of the year as Wolo switched to e-commerce marketing and sales, the cash register temporarily grew silent due. At the same time costs and expenses dropped by almost half to $326,497 in the final quarter of 2025, on reduced salaries, marketing and other general expenses.
If Wolo reaches profitability under the new operational paradigm, the team at 1847 Holdings should gained new credibility for its capacity to add real value to acquired operations. Portfolio strength and execution track record certainly should be factors in pricing LBRA.
Source: wolo-mfg.com
Business Model Celebration
The flip to profitability in 2025, gave management good reason to celebrate the achievement of goals for their acquisition portfolio model. 1847 Holdings’ operating income totaled $4.0 million in the full year 2025, comparing favorably to a $12.0 million operating loss in the previous year. As discussed above, the recently acquired CMD operation was the principal contributor to revenue and profits.
Even more importantly, the Company generated positive operating cash flow of $3.4 million in the full year 2025 compared to a net use of $12.6 million in cash resources to support operations in the previous year. Cash flow from operations is a helpful financial measure given the noise of non-cash expenses in the income statement such as warrant liabilities and management bonuses.
Sour Grapes
Not everyone is applauding. A shareholder has taken legal action against 1847 Holdings, claiming harm after the stock was delisted from the New York Stock Exchange in July 2025. The investor claims management failed to take necessary and timely steps to list the Company’s shares on another exchange. Indeed, it took four months to get back to a quotation of the shares under the LBRA symbol on the Over-the-Counter service. A trial date is expected to be set by the court in September 2026.
The $2.0 million in compensatory damages sought by the investor is material given the Company’s $1.98 million cash kitty at the end of December 2025. Management expresses confidence in the legal position of 1847 Holdings. Even if the Company prevails, the burden of defending against the claim may be a distraction from important operational matters.
It is noteworthy from the standpoint of assessing risk in a long position in LBRA, that even as its stock listing problems unfolded, management remained focused on the business. They worked on finding solutions for underperformance at Wolo and on acquiring a profitable specialty contractor. In the long run, that single mindedness is likely to boost shareholder value.
Source: OTCMarkets.com
Valuation
Conventional valuation based on earnings can be frustrated by ‘noise’ in financial results related to past issuance of warrants. In 2025, the Company reported a net gain of $73.6 million on its warrant liability. That non-cash figure had to be subtracted from net income to determine fully diluted earnings per share. Thus, even though the Company reported $1.78 basic earnings per share in the full year 2025, from a fully diluted perspective it was a net loss of one penny.
A multiple of sales is an alternative, even though it fails to fully represent operational success or failure and leaves out the impact of debt and other financing liabilities on reported profits. A group of thirty home building companies is trading at an enterprise value of 1.19 times sales. With an operating profit margin of 17.4%, 1847 Holdings compares favorably to the group that has an average operating profit margin of 12.6%. Application of this multiple implies an enterprise value near $52 million and a market value of $16.3 million or $0.0168 per share on a fully diluted basis.
Potential dilution weighs heavily on LBRA valuation. The conversion of outstanding notes or preferred stock and exercise of warrants could add as many as 1.8 billion in additional common stock shares to the already 65.3 million currently outstanding. Exercise of warrants represent the most significant source of dilution.
It is important to remember that with the warrant exercise comes an infusion of new capital at a weighted average price of $0.07 per share or $88.6 million. It is logical to consider investment of the cash as well as the dilutive effects of new share issuance.
Summary
The events of 2025 took a toll on the Company’s share price, now well below a penny per share. Granted there are risks from potential dilution and the threat of legal action by a disgruntled shareholder. Additionally, it takes some work to understand management’s strategy, especially when there is quite a bit of discussion in financial reports on newly added operations and on-and-off divestitures.
Nonetheless, LBRA appears egregiously undervalued against strong execution by the 1847 Holdings teams and the delivery of profit to the bottom line by the Company’s principal holding in CMD. The pending acquisition of another profitable construction-related operation could lead to a possible 50% increase in the revenue run rate and earnings should follow.
Neither the author of the Small Cap Strategist web log, Crystal Equity Research nor its affiliates have a beneficial interest in the companies mentioned herein.
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