Guess? Inc (GES, Financial) has recently experienced a notable uptick in its stock performance, with a market capitalization now standing at $1.28 billion. The current price of the stock is $23.83, which represents a 3.34% gain over the past week and a more significant 16.50% gain over the past three months. This recent price movement has caught the attention of investors and market analysts alike, prompting a closer examination of the factors contributing to this surge.
Understanding Guess? Inc's Valuation
The GF Value of Guess? Inc is currently $22.56, which is slightly below the current stock price, indicating that the stock is fairly valued. This is a shift from three months ago when the GF Value was higher at $24.48, suggesting that the stock was then modestly undervalued. The GF Value, defined by GuruFocus.com, calculates a stock's intrinsic value using historical multiples, past performance adjustments, and future business estimates. The transition from a modestly undervalued to a fairly valued status reflects the stock's recent price increase and the market's adjustment to Guess? Inc's growth prospects and financial health.
Introducing Guess? Inc
Guess? Inc operates within the retail-cyclical industry, designing, marketing, distributing, and licensing apparel and accessories that resonate with European fashion trends. The company's brand portfolio includes Guess, Marciano, and G by Guess. With five reportable segments—Americas Retail, Americas Wholesale, Europe, Asia, and Licensing—Guess? Inc generates the majority of its revenue from the Europe segment. This geographical diversification is a key aspect of the company's business strategy.
Profitability Insights
Guess? Inc's Profitability Rank stands at a robust 7/10, indicating a strong position within its industry. The company's Operating Margin is 8.55%, surpassing 72.85% of 1,116 companies in the same domain. Additionally, Guess? Inc boasts an impressive ROE of 31.44%, outperforming 90.59% of its peers, and an ROA of 6.04%, which is better than 72.2% of the industry. The company's ROIC of 11.85% also indicates efficient cash flow generation relative to capital invested, ranking higher than 78.13% of competitors. Over the past decade, Guess? Inc has maintained profitability for 8 years, showcasing its resilience and operational efficiency.
Growth Trajectory
The company's Growth Rank is currently at 2/10, which may raise concerns regarding its growth prospects. However, a closer look at specific growth metrics provides a nuanced picture. The 3-Year Revenue Growth Rate per Share is 0.90%, which is modest but still better than 40.08% of the industry. The 5-Year Revenue Growth Rate per Share stands at 5.30%, outpacing 60.3% of competitors. The Total Revenue Growth Rate (Future 3Y To 5Y Est) is projected at 2.06%, which, while not stellar, is still better than 26.75% of the industry. The 3-Year EPS without NRI Growth Rate is an impressive 23.60%, surpassing 67.22% of similar companies. These figures suggest that while overall growth may be slow, there are areas where Guess? Inc is making significant strides.
Investor Confidence
Notable investors have taken positions in Guess? Inc, signaling confidence in the company's future. Jefferies Group (Trades, Portfolio) holds 201,590 shares, representing a 0.38% stake in the company. Paul Tudor Jones (Trades, Portfolio) owns 137,967 shares, accounting for 0.26% of the company, and Steven Cohen (Trades, Portfolio) has invested in 44,176 shares, making up 0.08% of Guess? Inc's shares. These holdings reflect a belief in the company's value proposition and strategic direction.
Competitive Landscape
When compared to its competitors, Guess? Inc stands out in terms of market capitalization and performance. Chico's FAS Inc (CHS, Financial) has a market cap of $925.323 million, Caleres Inc (CAL, Financial) is valued at $952.632 million, and Victoria's Secret & Co (VSCO, Financial) boasts a market cap of $1.66 billion. Guess? Inc's market cap of $1.28 billion positions it well within this competitive set, indicating its significant presence in the retail-cyclical industry.
Conclusion
In summary, Guess? Inc's recent stock performance and valuation reflect a company that is fairly valued by the market, with strong profitability indicators and pockets of growth that suggest potential for future expansion. The company's strategic focus on European fashion sensibilities and diversified revenue streams across various segments contribute to its stability and appeal to investors. With significant holders demonstrating confidence in Guess? Inc and a competitive stance within the industry, the company's stock rally appears to be driven by a combination of solid financial health and strategic positioning. As investors continue to monitor the retail-cyclical sector, Guess? Inc remains a noteworthy player to watch.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
