0R15 9025.0 0.0% 0R1E 9410.0 0.0% 0M69 None None% 0R2V 247.99 9682.643% 0QYR 1567.5 0.0% 0QYP 439.3701 -2.9016% 0RUK None None% 0RYA 1597.0 1.2682% 0RIH 195.55 0.0% 0RIH 191.4 -2.1222% 0R1O 225.5 9683.0803% 0R1O None None% 0QFP 10475.8496 107.8542% 0M2Z 252.573 0.2373% 0VSO 33.0 -7.3164% 0R1I None None% 0QZI 622.0 0.0% 0QZ0 220.0 0.0% 0NZF None None% 0YXG 222.05 -4.1318%
Company Overview: Skechers U.S.A., Inc. (NYSE: SKX) creates and sells Skechers-branded lifestyle and performance footwear, apparel, and accessories for men, women, and children. Its operating segments are as follows: 1) Domestic Wholesale, which sells items through domestic wholesale distribution channels. 2) International Wholesale, which markets products to department shops and speciality retail outlets via joint ventures and subsidiaries. 3) Direct-to-Consumer, which sells products via e-commerce, concept stores, factory stores, and warehouse outlet stores.
SKX Details
Key Takeaways from Q3FY21 (ended September 30, 2021)
Revenues & Gross Profit Key Highlights; Analysis by Kalkine Group
Recent Developments:
Segment Wise Results Q3FY21
Segment Revenues Key Highlights; Analysis by Kalkine Group
Balance Sheet & Liquidity Position
Key Metrics: In Q3FY21, SKX's Gross and Operating margins were 49.6% and 9.4%, higher than 48.1% and 7.1%, respectively, reported in Q3FY20. Its Debt/Equity ratio has been improved to 0.12x in Q3FY21, from 0.34x in Q3FY20.
Leverage Profile; Analysis by Kalkine Group
Top 10 Shareholders: The top 10 shareholders together form around 56.25% of the total shareholding, while the top 4 constitute the maximum holding. Fidelity Management & Research Company LLC and The Vanguard Group, Inc. hold the maximum stake in the company at 14.86% and 9.17%, respectively, as also highlighted in the chart below:
Top 10 Shareholders; Analysis by Kalkine Group
Risk Analysis
Outlook
Valuation Methodology: EV/Sales Multiple Based Relative Valuation (Illustrative)
Source: Analysis by Kalkine Group
*% Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.
Stock Recommendation: SKX's share price has corrected 19.94% over the past six months. The stock is currently trading close to mid-band of its 52-week range of USD 33.80 to USD 55.87. We have valued the stock using the EV/Sales multiple-based illustrative relative valuation method and arrived at a target price with an upside of low twenties (in percentage terms). We believe that the company can trade at a slight discount compared to its peer's average, considering the competition from large peers, supply chain issues, and higher average inventory days. We have taken peers like Crocs, Inc. (NASDAQ: CROX) and PVH Corp. (NYSE: PVH). Considering the strong top and bottom-line performance, growth in a number of stores, expansion plans, encouraging outlook, and current valuation, we give a "Buy" recommendation on the stock on the closing price of USD 42.28, down 2.22% as of January 25, 2022.
SKX Technical Chart, Data Source: REFINITIV
Note 1: The reference data in this report has been partly sourced from REFINITIV.
Note 2: Investment decision should be made depending on the investors' appetite for upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the valuation has been achieved and subject to the factors discussed above.
Technical Indicators Defined
Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.
Resistance: A level where-in the stock prices tend to find resistance when they are rising, and the uptrend may take a pause due to profit booking or selling interest.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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