VSCO gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 122 industry peers in the Specialty Retail industry. There are concerns on the financial health of VSCO while its profitability can be described as average. VSCO is not valued too expensively and it also shows a decent growth rate.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

VSCO had positive earnings in the past year.
VSCO had a positive operating cash flow in the past year.
Of the past 5 years VSCO 4 years were profitable.
VSCO had a positive operating cash flow in each of the past 5 years.

1.2 Ratios

The Return On Assets of VSCO (3.31%) is better than 60.66% of its industry peers.
VSCO has a better Return On Equity (26.03%) than 84.43% of its industry peers.
Looking at the Return On Invested Capital, with a value of 6.85%, VSCO is in the better half of the industry, outperforming 64.75% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for VSCO is below the industry average of 12.24%.

		Industry Rank	Sector Rank
ROA	3.31%
ROE	26.03%
ROIC	6.85%

ROA(3y)4.47%

ROA(5y)5.31%

ROE(3y)47.59%

ROE(5y)77.21%

ROIC(3y)9.17%

ROIC(5y)N/A

1.3 Margins

VSCO's Profit Margin of 2.66% is fine compared to the rest of the industry. VSCO outperforms 67.21% of its industry peers.
In the last couple of years the Profit Margin of VSCO has declined.
VSCO has a better Operating Margin (5.02%) than 66.39% of its industry peers.
In the last couple of years the Operating Margin of VSCO has declined.
VSCO has a Gross Margin (36.40%) which is comparable to the rest of the industry.
VSCO's Gross Margin has improved in the last couple of years.

		Industry Rank	Sector Rank
OM	5.02%
PM (TTM)	2.66%
GM	36.4%

OM growth 3Y-28.61%

OM growth 5YN/A

PM growth 3Y-34.72%

PM growth 5YN/A

GM growth 3Y-3.67%

GM growth 5Y5.76%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), VSCO is destroying value.
Compared to 1 year ago, VSCO has more shares outstanding
VSCO has less shares outstanding than it did 5 years ago.
VSCO has a better debt/assets ratio than last year.

2.2 Solvency

An Altman-Z score of 2.25 indicates that VSCO is not a great score, but indicates only limited risk for bankruptcy at the moment.
VSCO has a Altman-Z score (2.25) which is comparable to the rest of the industry.
The Debt to FCF ratio of VSCO is 4.37, which is a neutral value as it means it would take VSCO, 4.37 years of fcf income to pay off all of its debts.
VSCO has a Debt to FCF ratio of 4.37. This is in the better half of the industry: VSCO outperforms 68.03% of its industry peers.
A Debt/Equity ratio of 2.06 is on the high side and indicates that VSCO has dependencies on debt financing.
The Debt to Equity ratio of VSCO (2.06) is worse than 68.03% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	2.06
Debt/FCF	4.37
Altman-Z	2.25

ROIC/WACC0.7

WACC9.77%

2.3 Liquidity

A Current Ratio of 1.30 indicates that VSCO should not have too much problems paying its short term obligations.
VSCO's Current ratio of 1.30 is in line compared to the rest of the industry. VSCO outperforms 50.82% of its industry peers.
A Quick Ratio of 0.38 indicates that VSCO may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.38, VSCO is doing worse than 61.48% of the companies in the same industry.

		Industry Rank	Sector Rank
Current Ratio	1.3
Quick Ratio	0.38

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

The Earnings Per Share has been growing slightly by 5.77% over the past year.
VSCO shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -25.48% yearly.
Looking at the last year, VSCO shows a small growth in Revenue. The Revenue has grown by 2.96% in the last year.
VSCO shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -3.67% yearly.

EPS 1Y (TTM)5.77%

EPS 3Y-25.48%

EPS 5YN/A

EPS Q2Q%46%

Revenue 1Y (TTM)2.96%

Revenue growth 3Y-2.8%

Revenue growth 5Y-3.67%

Sales Q2Q%9.21%

3.2 Future

Based on estimates for the next years, VSCO will show a quite strong growth in Earnings Per Share. The EPS will grow by 11.81% on average per year.
The Revenue is expected to grow by 4.09% on average over the next years.

EPS Next Y5.11%

EPS Next 2Y10%

EPS Next 3Y11.81%

EPS Next 5YN/A

Revenue Next Year5.7%

Revenue Next 2Y4.77%

Revenue Next 3Y4.09%

Revenue Next 5YN/A

3.3 Evolution

The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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.

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4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 20.36, VSCO is valued on the expensive side.
Based on the Price/Earnings ratio, VSCO is valued a bit cheaper than the industry average as 74.59% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 28.60. VSCO is valued slightly cheaper when compared to this.
Based on the Price/Forward Earnings ratio of 17.66, the valuation of VSCO can be described as rather expensive.
Based on the Price/Forward Earnings ratio, VSCO is valued a bit cheaper than the industry average as 68.03% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of VSCO to the average of the S&P500 Index (25.83), we can say VSCO is valued slightly cheaper.

		Industry Rank	Sector Rank
PE	20.36
Fwd PE	17.66

4.2 Price Multiples

VSCO's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. VSCO is cheaper than 63.11% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of VSCO indicates a somewhat cheap valuation: VSCO is cheaper than 75.41% of the companies listed in the same industry.

		Industry Rank	Sector Rank
P/FCF	14.53
EV/EBITDA	9.84

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates VSCO does not grow enough to justify the current Price/Earnings ratio.
The decent profitability rating of VSCO may justify a higher PE ratio.