NYSE:SKX is not too expensive for the growth it is showing.

Last update: Jun 7, 2024

Our stock screening tool has pinpointed SKECHERS USA INC-CL A (NYSE:SKX) as a growth stock that isn't overvalued. NYSE:SKX is excelling in various growth indicators while maintaining a solid financial footing. Furthermore, it remains attractively priced. Let's delve into the specifics below.

A Closer Look at Growth for NYSE:SKX

ChartMill assigns a proprietary Growth Rating to each stock. The score is computed by evaluating various growth aspects, like EPS and revenue growth. We take into account the history as well as the estimated future numbers. NYSE:SKX was assigned a score of 7 for growth:

The Earnings Per Share has grown by an impressive 44.49% over the past year.
SKX shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 11.78% yearly.
Looking at the last year, SKX shows a quite strong growth in Revenue. The Revenue has grown by 8.17% in the last year.
SKX shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 11.50% yearly.
The Earnings Per Share is expected to grow by 16.14% on average over the next years. This is quite good.
SKX is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.70% yearly.
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.

Understanding NYSE:SKX's 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 is valuated rather cheaply when we compare the Price/Earnings ratio to 28.21, which is the current average of the S&P500 Index.
SKX's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. SKX is cheaper than 68.00% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of SKX to the average of the S&P500 Index (20.07), we can say SKX is valued slightly cheaper.
SKX's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. SKX is cheaper than 62.00% of the companies in the same industry.
The decent profitability rating of SKX may justify a higher PE ratio.
A more expensive valuation may be justified as SKX's earnings are expected to grow with 19.59% in the coming years.

Evaluating Health: NYSE:SKX

ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. NYSE:SKX scores a 7 out of 10:

SKX has an Altman-Z score of 4.47. 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 4.47, SKX is in the better half of the industry, outperforming 76.00% of the companies in the same industry.
SKX has a debt to FCF ratio of 0.53. This is a very positive value and a sign of high solvency as it would only need 0.53 years to pay back of all of its debts.
The Debt to FCF ratio of SKX (0.53) is better than 80.00% of its industry peers.
A Debt/Equity ratio of 0.03 indicates that SKX is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.03, SKX is in the better half of the industry, outperforming 72.00% of the companies in the same industry.
A Current Ratio of 2.39 indicates that SKX has no problem at all paying its short term obligations.

Profitability Assessment of NYSE:SKX

ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NYSE:SKX has earned a 7 out of 10:

With a decent Return On Assets value of 7.82%, SKX is doing good in the industry, outperforming 76.00% of the companies in the same industry.
With a decent Return On Equity value of 14.28%, SKX is doing good in the industry, outperforming 74.00% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 11.85%, SKX is in the better half of the industry, outperforming 78.00% of the companies in the same industry.
The 3 year average ROIC (9.66%) for SKX is below the current ROIC(11.85%), indicating increased profibility in the last year.
Looking at the Profit Margin, with a value of 7.18%, SKX is in the better half of the industry, outperforming 72.00% of the companies in the same industry.
SKX has a Operating Margin of 10.42%. This is in the better half of the industry: SKX outperforms 74.00% of its industry peers.
SKX has a better Gross Margin (52.79%) than 64.00% of its industry peers.
In the last couple of years the Gross Margin of SKX has grown nicely.

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

For an up to date full fundamental analysis you can check the fundamental report of SKX

Keep in mind

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.