VICTORIA'S SECRET & CO (VSCO) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:VSCO - US9264001028 - Common Stock
56.635 USD
+0.74 (+1.33%)
Taking everything into account, VSCO scores 4 out of 10 in our fundamental rating. VSCO was compared to 122 industry peers in the Specialty Retail industry. While VSCO is still in line with the averages on profitability rating, there are concerns on its financial health. VSCO has a correct valuation and a medium growth rate.
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.
- In the past 5 years VSCO always reported a positive cash flow from operatings.
1.2 Ratios
- Looking at the Return On Assets, with a value of 3.31%, VSCO is in the better half of the industry, outperforming 60.66% of the companies in the same industry.
- With an excellent Return On Equity value of 26.03%, VSCO belongs to the best of the industry, outperforming 84.43% of the companies in the same industry.
- VSCO has a better Return On Invested Capital (6.85%) than 64.75% of its industry peers.
- 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 has a Profit Margin of 2.66%. This is in the better half of the industry: VSCO outperforms 67.21% of its industry peers.
- VSCO's Profit Margin has declined in the last couple of years.
- Looking at the Operating Margin, with a value of 5.02%, VSCO is in the better half of the industry, outperforming 66.39% of the companies in the same industry.
- In the last couple of years the Operating Margin of VSCO has declined.
- VSCO has a Gross Margin of 36.40%. This is comparable to the rest of the industry: VSCO outperforms 49.18% of its industry peers.
- In the last couple of years the Gross Margin of VSCO has grown nicely.
| 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%
2. Health
2.1 Basic Checks
- VSCO has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
- Compared to 1 year ago, VSCO has more shares outstanding
- The number of shares outstanding for VSCO has been reduced compared to 5 years ago.
- VSCO has a better debt/assets ratio than last year.
2.2 Solvency
- An Altman-Z score of 2.24 indicates that VSCO is not a great score, but indicates only limited risk for bankruptcy at the moment.
- VSCO has a Altman-Z score (2.24) which is in line with its industry peers.
- VSCO has a debt to FCF ratio of 4.37. This is a neutral value as VSCO would need 4.37 years to pay back of all of its debts.
- With a decent Debt to FCF ratio value of 4.37, VSCO is doing good in the industry, outperforming 68.03% of the companies in the same industry.
- A Debt/Equity ratio of 2.06 is on the high side and indicates that VSCO has dependencies on debt financing.
- VSCO has a worse Debt to Equity ratio (2.06) than 68.03% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.06 | ||
| Debt/FCF | 4.37 | ||
| Altman-Z | 2.24 |
ROIC/WACC0.7
WACC9.73%
2.3 Liquidity
- A Current Ratio of 1.30 indicates that VSCO should not have too much problems paying its short term obligations.
- VSCO has a Current ratio of 1.30. This is comparable to the rest of the industry: VSCO outperforms 50.82% of its industry peers.
- VSCO has a Quick Ratio of 1.30. This is a bad value and indicates that VSCO is not financially healthy enough and could expect problems in meeting its short term obligations.
- VSCO has a Quick ratio of 0.38. This is in the lower half of the industry: VSCO underperforms 61.48% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.3 | ||
| Quick Ratio | 0.38 |
3. Growth
3.1 Past
- VSCO shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 5.77%.
- The earnings per share for VSCO have been decreasing by -25.48% on average. This is quite bad
- VSCO shows a small growth in Revenue. In the last year, the Revenue has grown by 2.96%.
- Measured over the past years, VSCO shows a decrease in Revenue. The Revenue has been decreasing by -3.67% on average per year.
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
- The Earnings Per Share is expected to grow by 11.81% on average over the next years. This is quite good.
- 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.
4. Valuation
4.1 Price/Earnings Ratio
- A Price/Earnings ratio of 20.59 indicates a rather expensive valuation of VSCO.
- Compared to the rest of the industry, the Price/Earnings ratio of VSCO indicates a somewhat cheap valuation: VSCO is cheaper than 74.59% of the companies listed in the same industry.
- VSCO's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 28.82.
- VSCO is valuated rather expensively with a Price/Forward Earnings ratio of 17.86.
- Based on the Price/Forward Earnings ratio, VSCO is valued a bit cheaper than the industry average as 68.85% of the companies are valued more expensively.
- Compared to an average S&P500 Price/Forward Earnings ratio of 25.95, VSCO is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.59 | ||
| Fwd PE | 17.86 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of VSCO indicates a somewhat cheap valuation: VSCO is cheaper than 63.11% of the companies listed in the same industry.
- Based on the Price/Free Cash Flow ratio, VSCO is valued a bit cheaper than the industry average as 77.05% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 14.69 | ||
| EV/EBITDA | 9.76 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- VSCO has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)4.03
PEG (5Y)N/A
EPS Next 2Y10%
EPS Next 3Y11.81%
5. Dividend
5.1 Amount
- VSCO does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
VICTORIA'S SECRET & CO / VSCO FAQ
Can you provide the ChartMill fundamental rating for VICTORIA'S SECRET & CO?
ChartMill assigns a fundamental rating of 4 / 10 to VSCO.
What is the valuation status for VSCO stock?
ChartMill assigns a valuation rating of 4 / 10 to VICTORIA'S SECRET & CO (VSCO). This can be considered as Fairly Valued.
How profitable is VICTORIA'S SECRET & CO (VSCO) stock?
VICTORIA'S SECRET & CO (VSCO) has a profitability rating of 6 / 10.
How financially healthy is VICTORIA'S SECRET & CO?
The financial health rating of VICTORIA'S SECRET & CO (VSCO) is 3 / 10.
Can you provide the expected EPS growth for VSCO stock?
The Earnings per Share (EPS) of VICTORIA'S SECRET & CO (VSCO) is expected to grow by 5.11% in the next year.