NYSE:SKX is showing decent growth, but is still valued reasonably.

Last update: Jan 7, 2025

SKECHERS USA INC-CL A (NYSE:SKX) has caught the eye of our stock screener as an affordable growth stock. NYSE:SKX is displaying robust growth metrics and also excels in terms of profitability, solvency, and liquidity. Additionally, it appears to be reasonably priced. Let's delve into the details.

Understanding NYSE:SKX's Growth

ChartMill assigns a Growth Rating to each stock, ranging from 0 to 10. This rating is determined by analyzing different growth elements, including EPS and revenue growth, spanning both historical and future figures. In the case of NYSE:SKX, the assigned 7 reflects its growth potential:

The Earnings Per Share has grown by an nice 19.06% over the past year.
The Earnings Per Share has been growing by 11.78% on average over the past years. This is quite good.
SKX shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 10.10%.
SKX shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 11.50% yearly.
SKX is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 16.26% yearly.
Based on estimates for the next years, SKX will show a quite strong growth in Revenue. The Revenue will grow by 9.44% on average per year.
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.

Looking at the Valuation

ChartMill employs its own Valuation Rating system for all stocks. This score, ranging from 0 to 10, is determined by evaluating different valuation factors, including price to earnings and free cash flow, both in absolute terms and relative to the market and industry. NYSE:SKX has earned a 5 for valuation:

Compared to the rest of the industry, the Price/Earnings ratio of SKX indicates a somewhat cheap valuation: SKX is cheaper than 66.67% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of SKX to the average of the S&P500 Index (27.40), we can say SKX is valued slightly cheaper.
SKX's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. SKX is cheaper than 68.75% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.67, SKX is valued a bit cheaper.
SKX's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. SKX is cheaper than 79.17% 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.
A more expensive valuation may be justified as SKX's earnings are expected to grow with 18.65% in the coming years.

Assessing Health Metrics for NYSE:SKX

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

An Altman-Z score of 3.84 indicates that SKX is not in any danger for bankruptcy at the moment.
SKX has a better Altman-Z score (3.84) than 72.92% of its industry peers.
The Debt to FCF ratio of SKX is 1.58, which is an excellent value as it means it would take SKX, only 1.58 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 1.58, SKX is doing good in the industry, outperforming 72.92% of the companies in the same industry.
A Debt/Equity ratio of 0.06 indicates that SKX is not too dependend on debt financing.
SKX has a Debt to Equity ratio of 0.06. This is in the better half of the industry: SKX outperforms 75.00% of its industry peers.

Profitability Analysis for 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:

SKX has a better Return On Assets (7.26%) than 77.08% of its industry peers.
SKX has a Return On Equity of 14.39%. This is in the better half of the industry: SKX outperforms 77.08% of its industry peers.
SKX has a Return On Invested Capital of 10.99%. This is in the better half of the industry: SKX outperforms 77.08% of its industry peers.
The last Return On Invested Capital (10.99%) for SKX is above the 3 year average (9.66%), which is a sign of increasing profitability.
Looking at the Profit Margin, with a value of 7.20%, SKX is in the better half of the industry, outperforming 75.00% of the companies in the same industry.
SKX's Operating Margin of 9.97% is fine compared to the rest of the industry. SKX outperforms 72.92% of its industry peers.
The Gross Margin of SKX (53.12%) is better than 62.50% of its industry peers.
In the last couple of years the Gross Margin of SKX has grown nicely.

More Affordable Growth stocks can be found in our Affordable Growth screener.

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

Disclaimer

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.