Shares of Skechers (SKX, Financial) experienced a significant drop, falling by 9.62% to a price of $61.56. The decline is attributed to potential challenges in some Asian markets, particularly in China, where consumer discretionary pressures are worse than anticipated by the company's management.
The broader footwear segment has also been affected by concerns regarding Skechers' performance ahead of the next earnings season, influencing brands like Deckers and Crocs.
From a financial standpoint, Skechers has several metrics that investors should consider. Despite the recent dip, the company maintains a market cap of $9.38 billion and a price-to-earnings (PE) ratio of 16.5. The stock exhibits solid financial strength with an Altman Z-score of 4.31, indicating a low risk of financial distress. Furthermore, the Piotroski F-Score is 8, reflecting a very healthy situation, and the Beneish M-Score of -2.84 suggests that the company is unlikely to be a manipulator.
On the valuation front, Skechers is currently fairly valued based on its GF Value, which is calculated at $59.37. For more detailed valuation analysis, you can visit the GF Value page. The company's price is near its intrinsic value estimate of $61.69, which indicates that it is trading close to its fair market value.
Looking at the company's growth metrics, Skechers has shown an 8.9% revenue growth over the past year and a 12.3% annual growth rate over the past five years. The company's EBITDA has grown by 27.7% over the past year, and its operating margin is expanding, which is typically a good sign for profitability.
However, there are some warning signs to be mindful of. Skechers' stock price is close to its 10-year high, and the company's price-to-sales ratio of 1.26 is approaching its 3-year high. Additionally, the company has been issuing new debt and has seen insider selling, with 422,000 shares sold over the past three months.
In terms of market activity, Skechers has a strong turnover with a daily trading volume of 3,448,194 shares. The company's enterprise value is $10.74 billion, and its debt levels remain within acceptable limits.
Overall, while there are some risks, Skechers demonstrates solid financial health and growth potential. Investors should keep an eye on upcoming earnings and market developments, especially concerning the Asian markets, to make informed decisions.
