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Skechers U.S.A., Inc. (SKX) Soars to 52-Week High, Time to Cash Out?
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Shares of Skechers (SKX - Free Report) have been strong performers lately, with the stock up 18.8% over the past month. The stock hit a new 52-week high of $57.46 in the previous session. Skechers has gained 36.1% since the start of the year compared to the 11.4% move for the Zacks Consumer Discretionary sector and the -9.7% return for the Zacks Shoes and Retail Apparel industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on October 26, 2023, Skechers reported EPS of $0.93 versus consensus estimate of $0.78.
For the current fiscal year, Skechers is expected to post earnings of $3.44 per share on $8.05 billion in revenues. This represents a 44.54% change in EPS on an 8.15% change in revenues. For the next fiscal year, the company is expected to earn $3.99 per share on $8.86 billion in revenues. This represents a year-over-year change of 15.99% and 10.04%, respectively.
Valuation Metrics
Skechers may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Skechers has a Value Score of A. The stock's Growth and Momentum Scores are B and F, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 16.6X current fiscal year EPS estimates, which is a premium to the peer industry average of 15.8X. On a trailing cash flow basis, the stock currently trades at 16.8X versus its peer group's average of 9.5X. Additionally, the stock has a PEG ratio of 0.61. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Skechers currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Skechers meets the list of requirements. Thus, it seems as though Skechers shares could have potential in the weeks and months to come.
How Does SKX Stack Up to the Competition?
Shares of SKX have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Rocky Brands, Inc. (RCKY - Free Report) . RCKY has a Zacks Rank of # 1 (Strong Buy) and a Value Score of A, a Growth Score of A, and a Momentum Score of B.
Earnings were strong last quarter. Rocky Brands, Inc. beat our consensus estimate by 251.61%, and for the current fiscal year, RCKY is expected to post earnings of $2.55 per share on revenue of $464.46 million.
Shares of Rocky Brands, Inc. have gained 111.3% over the past month, and currently trade at a forward P/E of 15.65X and a P/CF of 5.36X.
The Shoes and Retail Apparel industry is in the top 10% of all the industries we have in our universe, so it looks like there are some nice tailwinds for SKX and RCKY, even beyond their own solid fundamental situation.
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Skechers U.S.A., Inc. (SKX) Soars to 52-Week High, Time to Cash Out?
Shares of Skechers (SKX - Free Report) have been strong performers lately, with the stock up 18.8% over the past month. The stock hit a new 52-week high of $57.46 in the previous session. Skechers has gained 36.1% since the start of the year compared to the 11.4% move for the Zacks Consumer Discretionary sector and the -9.7% return for the Zacks Shoes and Retail Apparel industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on October 26, 2023, Skechers reported EPS of $0.93 versus consensus estimate of $0.78.
For the current fiscal year, Skechers is expected to post earnings of $3.44 per share on $8.05 billion in revenues. This represents a 44.54% change in EPS on an 8.15% change in revenues. For the next fiscal year, the company is expected to earn $3.99 per share on $8.86 billion in revenues. This represents a year-over-year change of 15.99% and 10.04%, respectively.
Valuation Metrics
Skechers may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Skechers has a Value Score of A. The stock's Growth and Momentum Scores are B and F, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 16.6X current fiscal year EPS estimates, which is a premium to the peer industry average of 15.8X. On a trailing cash flow basis, the stock currently trades at 16.8X versus its peer group's average of 9.5X. Additionally, the stock has a PEG ratio of 0.61. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Skechers currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Skechers meets the list of requirements. Thus, it seems as though Skechers shares could have potential in the weeks and months to come.
How Does SKX Stack Up to the Competition?
Shares of SKX have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Rocky Brands, Inc. (RCKY - Free Report) . RCKY has a Zacks Rank of # 1 (Strong Buy) and a Value Score of A, a Growth Score of A, and a Momentum Score of B.
Earnings were strong last quarter. Rocky Brands, Inc. beat our consensus estimate by 251.61%, and for the current fiscal year, RCKY is expected to post earnings of $2.55 per share on revenue of $464.46 million.
Shares of Rocky Brands, Inc. have gained 111.3% over the past month, and currently trade at a forward P/E of 15.65X and a P/CF of 5.36X.
The Shoes and Retail Apparel industry is in the top 10% of all the industries we have in our universe, so it looks like there are some nice tailwinds for SKX and RCKY, even beyond their own solid fundamental situation.