For those who appreciate growth without the sticker shock, NYSE:SKX is worth considering.

Our stock screener has singled out SKECHERS USA INC-CL A (NYSE:SKX) as an attractive growth opportunity. NYSE:SKX is demonstrating remarkable growth potential while maintaining strong financial indicators, making it a reasonably priced option. We'll explore this further.

What does the Growth looks like for NYSE:SKX

ChartMill employs its own Growth Rating system for all stocks. This score, ranging from 0 to 10, is derived by evaluating different growth factors, such as EPS and revenue growth, taking into account both past performance and future projections. NYSE:SKX has earned a 7 for growth:

• SKX shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 44.49%, which is quite impressive.
• Measured over the past years, SKX shows a quite strong growth in Earnings Per Share. The EPS has been growing by 11.78% on average per year.
• SKX shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 8.17%.
• Measured over the past years, SKX shows a quite strong growth in Revenue. The Revenue has been growing by 11.50% on average per year.
• SKX is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 16.14% yearly.
• The Revenue is expected to grow by 8.70% on average over the next years. This is quite good.
• When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

Understanding NYSE:SKX's Valuation

An integral part of ChartMill's stock analysis is the Valuation Rating, which spans from 0 to 10. This rating evaluates diverse valuation factors, including price to earnings and cash flows, while considering the stock's profitability and growth. NYSE:SKX has received a 5 out of 10:

• SKX is valuated rather cheaply when we compare the Price/Earnings ratio to 24.43, which is the current average of the S&P500 Index.
• Compared to the rest of the industry, the Price/Forward Earnings ratio of SKX indicates a somewhat cheap valuation: SKX is cheaper than 66.00% of the companies listed in the same industry.
• When comparing the Price/Forward Earnings ratio of SKX to the average of the S&P500 Index (20.38), we can say SKX is valued slightly cheaper.
• Based on the Enterprise Value to EBITDA ratio, SKX is valued a bit cheaper than the industry average as 66.00% of the companies are valued more expensively.
• The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
• The decent profitability rating of SKX may justify a higher PE ratio.
• SKX's earnings are expected to grow with 19.59% in the coming years. This may justify a more expensive valuation.

Deciphering NYSE:SKX's Health Rating

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NYSE:SKX, the assigned 8 reflects its health status:

• An Altman-Z score of 4.28 indicates that SKX is not in any danger for bankruptcy at the moment.
• SKX has a Altman-Z score of 4.28. This is in the better half of the industry: SKX outperforms 74.00% of its industry peers.
• The Debt to FCF ratio of SKX is 0.53, which is an excellent value as it means it would take SKX, only 0.53 years of fcf income to pay off all of its debts.
• Looking at the Debt to FCF ratio, with a value of 0.53, SKX belongs to the top of the industry, outperforming 82.00% of the companies in the same industry.
• A Debt/Equity ratio of 0.03 indicates that SKX is not too dependend on debt financing.
• With a decent Debt to Equity ratio value of 0.03, SKX is doing good in the industry, outperforming 76.00% 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.

Evaluating Profitability: 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:

• Looking at the Return On Assets, with a value of 7.82%, SKX is in the better half of the industry, outperforming 76.00% of the companies in the same industry.
• Looking at the Return On Equity, with a value of 14.28%, SKX is in the better half of the industry, outperforming 74.00% of the companies in the same industry.
• The Return On Invested Capital of SKX (11.85%) is better than 78.00% of its industry peers.
• The 3 year average ROIC (9.66%) for SKX is below the current ROIC(11.85%), indicating increased profibility in the last year.
• The Profit Margin of SKX (7.18%) is better than 72.00% of its industry peers.
• SKX's Operating Margin of 10.42% is fine compared to the rest of the industry. SKX outperforms 74.00% of its industry peers.
• The Gross Margin of SKX (52.79%) is better than 64.00% of its industry peers.
• SKX's Gross Margin has improved in the last couple of years.

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

Our latest full fundamental report of SKX contains the most current fundamental analsysis.

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.