For those who appreciate value investing, NYSE:TPR is a compelling option with its solid fundamentals.

Last update: Nov 23, 2023

TAPESTRY INC (NYSE:TPR) was identified as a decent value stock by our stock screener. NYSE:TPR scores well on profitability, solvency and liquidity. At the same time it seems to be priced very reasonably. We'll explore this a bit deeper below.

Assessing Valuation for NYSE:TPR

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:TPR has received a 9 out of 10:

With a Price/Earnings ratio of 7.56, the valuation of TPR can be described as very cheap.
95.92% of the companies in the same industry are more expensive than TPR, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of TPR to the average of the S&P500 Index (24.54), we can say TPR is valued rather cheaply.
With a Price/Forward Earnings ratio of 6.69, the valuation of TPR can be described as very cheap.
Based on the Price/Forward Earnings ratio, TPR is valued cheaper than 95.92% of the companies in the same industry.
TPR is valuated cheaply when we compare the Price/Forward Earnings ratio to 19.58, which is the current average of the S&P500 Index.
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of TPR indicates a rather cheap valuation: TPR is cheaper than 93.88% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of TPR indicates a rather cheap valuation: TPR is cheaper than 85.71% of the companies listed in the same industry.
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
TPR has an outstanding profitability rating, which may justify a higher PE ratio.

Profitability Analysis for NYSE:TPR

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:TPR, the assigned 9 is noteworthy for profitability:

The Return On Assets of TPR (13.10%) is better than 87.76% of its industry peers.
TPR's Return On Equity of 38.73% is amongst the best of the industry. TPR outperforms 95.92% of its industry peers.
The Return On Invested Capital of TPR (16.11%) is better than 85.71% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for TPR is above the industry average of 10.81%.
The last Return On Invested Capital (16.11%) for TPR is above the 3 year average (15.58%), which is a sign of increasing profitability.
TPR's Profit Margin of 14.03% is amongst the best of the industry. TPR outperforms 91.84% of its industry peers.
In the last couple of years the Profit Margin of TPR has grown nicely.
TPR's Operating Margin of 17.57% is amongst the best of the industry. TPR outperforms 91.84% of its industry peers.
In the last couple of years the Operating Margin of TPR has grown nicely.
Looking at the Gross Margin, with a value of 71.36%, TPR belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
In the last couple of years the Gross Margin of TPR has grown nicely.

ChartMill's Evaluation of Health

ChartMill assigns a proprietary Health Rating to each stock. The score is computed by evaluating various liquidity and solvency ratios and ranges from 0 to 10. NYSE:TPR was assigned a score of 5 for health:

The Debt to FCF ratio of TPR is 1.59, which is an excellent value as it means it would take TPR, only 1.59 years of fcf income to pay off all of its debts.
TPR has a better Debt to FCF ratio (1.59) than 71.43% of its industry peers.
Although TPR does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
TPR has a Current Ratio of 2.02. This indicates that TPR is financially healthy and has no problem in meeting its short term obligations.

ChartMill's Evaluation of Growth

To evaluate a stock's growth potential, ChartMill utilizes a Growth Rating on a scale of 0 to 10. This comprehensive assessment considers various growth aspects, including historical and estimated EPS and revenue growth. NYSE:TPR has achieved a 5 out of 10:

The Earnings Per Share has grown by an nice 17.89% over the past year.
The Earnings Per Share has been growing by 8.09% on average over the past years. This is quite good.
Based on estimates for the next years, TPR will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.58% on average per year.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

Our Decent Value screener lists more Decent Value stocks and is updated daily.

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

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.