NYSE:SKX stands out as a growth opportunity that won't break the bank.

Last update: Jan 23, 2024

SKECHERS USA INC-CL A (NYSE:SKX) was identified as an affordable growth stock by our stock screener. NYSE:SKX is showing great growth, but also scores well on profitability, solvency and liquidity. At the same time it seems to be priced reasonably. We'll explore this a bit deeper below.

Evaluating Growth: NYSE:SKX

Every stock receives a Growth Rating from ChartMill, ranging from 0 to 10. This rating assesses various growth aspects, including historical and projected EPS and revenue growth. NYSE:SKX boasts a 7 out of 10:

SKX shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 46.35%, which is quite impressive.
Looking at the last year, SKX shows a quite strong growth in Revenue. The Revenue has grown by 9.65% in the last year.
Measured over the past years, SKX shows a quite strong growth in Revenue. The Revenue has been growing by 12.32% on average per year.
Based on estimates for the next years, SKX will show a very strong growth in Earnings Per Share. The EPS will grow by 20.31% on average per year.
Based on estimates for the next years, SKX will show a quite strong growth in Revenue. The Revenue will grow by 9.11% on average per year.
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.

ChartMill's Evaluation of Valuation

ChartMill assigns a proprietary Valuation Rating to each stock. The score is computed by evaluating various valuation aspects, like price to earnings and free cash flow, both absolutely as relative to the market and industry. NYSE:SKX was assigned a score of 5 for valuation:

SKX's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 25.97.
The average S&P500 Price/Forward Earnings ratio is at 20.90. SKX is valued slightly cheaper when compared to this.
Based on the Price/Free Cash Flow ratio, SKX is valued a bit cheaper than 69.39% of the companies in the same industry.
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
SKX has a very decent profitability rating, which may justify a higher PE ratio.
SKX's earnings are expected to grow with 27.80% in the coming years. This may justify a more expensive valuation.

Understanding NYSE:SKX's Health Score

Every stock is evaluated by ChartMill, receiving a Health Rating on a scale of 0 to 10. This assessment considers different health aspects, including liquidity and solvency, both in absolute terms and relative to industry peers. NYSE:SKX has achieved a 8 out of 10:

SKX has an Altman-Z score of 4.31. This indicates that SKX is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 4.31, SKX is in the better half of the industry, outperforming 73.47% of the companies in the same industry.
SKX has a debt to FCF ratio of 0.41. This is a very positive value and a sign of high solvency as it would only need 0.41 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 0.41, SKX belongs to the top of the industry, outperforming 81.63% of the companies in the same industry.
SKX has a Debt/Equity ratio of 0.07. This is a healthy value indicating a solid balance between debt and equity.
SKX has a Debt to Equity ratio of 0.07. This is in the better half of the industry: SKX outperforms 69.39% of its industry peers.
A Current Ratio of 2.52 indicates that SKX has no problem at all paying its short term obligations.
SKX has a better Quick ratio (1.60) than 65.31% of its industry peers.

Evaluating Profitability: NYSE:SKX

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NYSE:SKX, the assigned 7 is noteworthy for profitability:

SKX has a Return On Assets of 7.38%. This is in the better half of the industry: SKX outperforms 67.35% of its industry peers.
SKX's Return On Equity of 13.51% is fine compared to the rest of the industry. SKX outperforms 63.27% of its industry peers.
SKX's Return On Invested Capital of 10.53% is fine compared to the rest of the industry. SKX outperforms 75.51% of its industry peers.
The 3 year average ROIC (6.98%) for SKX is below the current ROIC(10.53%), indicating increased profibility in the last year.
SKX's Profit Margin of 6.75% is fine compared to the rest of the industry. SKX outperforms 69.39% of its industry peers.
SKX's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 9.36%, SKX is in the better half of the industry, outperforming 65.31% of the companies in the same industry.
With a decent Gross Margin value of 50.78%, SKX is doing good in the industry, outperforming 63.27% of the companies in the same industry.

Every day, new Affordable Growth stocks can be found on ChartMill in our Affordable Growth screener.

Check the latest full fundamental report of SKX for a complete fundamental analysis.

Disclaimer

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.