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CHKP Stock Study (7-31-24)

Posted by on September 20, 2024 at 07:03 | Last modified: July 31, 2024 11:56

I recently did a stock study on Check Point Software Technologies Inc. (CHKP) with a closing price of $182.43.

M* writes:

     > Check Point Software Technologies is a pure-play cybersecurity
     > vendor. The company offers solutions for network, endpoint,
     > cloud, and mobile security in addition to security management.
     > Check Point, a software specialist, sells to enterprises,
     > businesses, and consumers. Around 50% of revenue is generated
     > in Europe, the Middle East, and Africa, 40% from the Americas,
     > and 10% from the Asia-Pacific region. The firm, based in Tel
     > Aviv, Israel, was founded in 1993 and has about 5,000 employees.

Over the past 10 years, this medium-size company has grown sales and EPS at annualized rates of 5.1% and 8.0%, respectively. Lines are up, straight, and parallel without exception. Value Line gives an Earnings Predictability score of 100. Stock price shows a similar upward march and is now trading near top of its 52-week range. Except for the latter, perhaps, visual inspection is picture-perfect.

Over the past decade, PTPM leads peer and industry averages despite [also] trending lower from 55.5% (’14) to 40.4% (’23) with a last-5-year mean of 43.8%. ROE leads peer and industry averages while increasing from 17.4% (’14) to 28.8% (’23) with a last-5-year mean of 25.0%. Debt-to-Capital is much less than peer and industry averages at zero throughout: a horizontal line. I’ve never seen such a thing (especially given the 2017 FASB GAAP change in 2017 with regard to rentals/leases) and am honestly a bit puzzled since Value Line reports annual rentals of $6.3M.

M* reports Quick Ratio of 1.2, rates the company “Standard” for Capital Allocation, and assigns a “Narrow” Economic Moat. Value Line gives an A+ grade for Financial Strength.

With regard to sales growth:

My 4.0% forecast is below the range.

With regard to EPS growth:

My 5.0% forecast is at bottom of the long-term-estimate range (mean of six: 7.3%). Initial value is ’23 EPS of $7.10/share (annualized) rather than 2024 Q2 EPS of $7.24 (annualized).

My Forecast High P/E is 21.0. Over the past decade, high P/E ranges from 21.5 in ’16 to 24.7 in ’17 with a last-5-year mean of 23.2 and a last-5-year-mean average P/E of 20.3 (19.9 including 2020 low P/E). I am below the 10-year range.

My Forecast Low P/E is 16.0. Over the past decade, low P/E ranges from 16.5 in ’23 (excluding 13.4 in ’20—possibly due to COVID-19) to 18.5 in ’19 with a last-5-year mean of 17.5 (16.7 with ’20 included). I am forecasting below the range.

My Low Stock Price Forecast (LSPF) is $127.00. The default ($115.80) based on initial value given above seems unreasonably low at 36.5% less than previous close and 7.9% less than 52-week low. My (arbitrary) projection is 30.4% less and 1.0% above, respectively.

These inputs land CHKP in the SELL zone with a U/D ratio of 0.1. Total Annualized Return (TAR) is 0.8%.

PAR (using Forecast Average—not High—P/E) of -1.7% is unacceptable for any size company. If a healthy margin of safety (MOS) anchors the study, then I can proceed based on TAR instead but even that falls well short of the current yield on T-bills.

To assess MOS, I compare my inputs with those of Member Sentiment (MS). Based on only 32 studies (my study and six outliers excluded) over the past 90 days, averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, and Forecast Low P/E are 5.5%, 6.8%, 22.9, and 16.4, respectively. I am lower across the board. Value Line’s projected average annual P/E of 22.0 is higher than MS (19.7) and higher than mine (18.5).

MS high / low EPS are $10.15 / $7.17 versus my $9.06 / $7.24 (per share). My high EPS is less due to a lower growth rate. Value Line’s high EPS of $12.20 is greater than both.

MS LSPF of $115.20 implies Forecast Low P/E of 16.1: close to the 16.4 above. MS LSPF is 2.0% less than the default $7.17/share * 16.4 = $117.59 resulting in more conservative zoning. MS LSPF is also 9.3% less than mine.

With regard to valuation, PEG is 2.5 and 4.8 per Zacks and my projected P/E, respectively: decisively overvalued. Relative Value [(current P/E) / 5-year-mean average P/E] is quite high at 1.3.

MOS is robust because my inputs are near or below respective analyst/historical ranges. Although comparison with MS is limited due to small sample size, its 6.5% TAR is anecdotally 5.7%/year greater than mine.

Based on visual inspection and management metrics, this feels like an overvalued yet high-quality stock. While PTPM is in a clear downtrend (suggesting increasing COGS), it remains higher than a similar-trending line for peers and the industry.

I feel comfortable to say investing in such high-flying, overvalued stocks is not the BI way. Debate in the financial industry does rage on between growth or momentum and value, however. CFRA rates the company a Buy and just two weeks [albeit 17 points] ago, Value Line wrote “appreciation potential to 2027-2029 is attractive. This issue is suitable for most accounts.”

Per U/D, CHKP is a BUY under $142/share. BI TAR criterion is met < $95/share given a forecast high price ~$190.

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GPN Stock Study (7-30-24)

Posted by on September 18, 2024 at 07:11 | Last modified: July 30, 2024 11:14

I recently did a stock study on Global Payments Inc. (GPN) with a closing price of $101.57. Previous studies are here and here.

M* writes:

     > Global Payments is a leading provider of payment processing and
     > software solutions and focuses on serving small and midsize
     > merchants. The company operates in 30 countries and generates
     > about one fourth of its revenue from outside North America,
     > primarily in Europe and Asia. In 2019, Global Payments merged
     > with Total System Services in an all-stock deal that gave Total
     > System Services shareholders 48% of the combined company’s
     > shares. The merger added issuer processing operations.

Over the last 10 years, the medium-size company has grown sales and earnings at annualized rates of 16.9% and 5.4%, respectively. I am excluding ’22 from the whole analysis due to EPS impact by goodwill impairment. Per the 2022 10-K:

     > A sustained decline in our share price and increases in discount
     > rates, primarily resulting from increased economic uncertainty,
     > indicated a potential decline in fair value and triggered a
     > requirement to evaluate our Issuer Solutions and our former
     > Business and Consumer Solutions reporting units for potential
     > impairment as of June 30, 2022… Based on the quantitative
     > assessment of our former Business and Consumer Solutions
     > reporting unit, including consideration of the consumer business
     > disposal group and the remaining assets of the reporting unit,
     > we recognized a goodwill impairment charge of $833.1 million
     > in our consolidated statement of income during the three
     > months ended June 30, 2022.

Global Payments Inc. probably does not clear the barbed wire fence (visual inspection), which may explain why so few stock studies have been done. Revenue [data is missing for ’16 and] is down YOY in ’18 while EPS is [missing for ’16 and] down in ’15, ’18, ’19, and ’20. EPS R^2 is 0.77 and 0.33 for 5 and 10 years, respectively.

Although I would therefore limit investment to speculative size only, price bars in ’17 and ’24 overlap. This represents several years without significant stock appreciation. I hope for a “coiled spring” effect when seeing this.

Over the last decade, PTPM is higher than peer and industry averages while ranging from 8.0% in ’20 to 16.7% in ’18 with a last-5-year mean of 10.7%. ROE is [alarmingly low albeit] slightly better than peer and industry averages while ranging from 2.1% in ’20 to 37.5% in ’15 with a last-5-year mean of 3.1%. Debt-to-Capital is less than peer and industry averages since 2019 while falling from 75.5% (’14) to 43.0% (’23) with a last-5-year mean of 31.8%.

Per M*, Quick Ratio and Interest Coverage are a concerning 0.31 and 3.2, respectively.

The numerous analysts covering this company gives me some reassurance about liquidity. Aside from all the analysts included in consensus estimates shown below, M* says the balance sheet is sound and gives a “Standard” rating for Capital Allocation. Value Line gives a B++ rating for Financial Strength (one notch above its median) and says Global Payments “should continue to meet its various obligations with minimal difficulty.”

With regard to sales growth:

My 4.0% forecast is near bottom of the range.

With regard to EPS growth:

My 11.0% forecast is below the long-term-estimate range (mean of six: 14.9%). Initial value is ’23 EPS of $3.77/share rather than 2024 Q1 $5.04 (annualized).

My Forecast High P/E is 30.0. Over the last 10 years, high P/E trends up from 25.7 in ’14 to 36.6 in ’23 with what I suspect are surrounding NMF [85.8, 111, 67.1, and 384 in ’19, ’20, ’21, and ’22]. The last-5-year mean reduces to 36.6 (’23 value) and the last 5-year-mean average P/E (with respective exclusions for low P/E) reduces to 30.8 (’23 value). I am near lower end of the 10-year range (only ’14 is less).

My Forecast Low P/E is 21.0. Over the last 10 years, low P/E trends up from 16.3 in ’14 to 24.9 in ’23 with what I suspect are surrounding NMF [45.6, 54.1, and 231 in ’19, ’20, and ’22]. The last-5-year mean reduces to 30.2 (’21 and ’23 values). My forecast is near bottom of the range (only ’14 is less).

My Low Stock Price Forecast (LSPF) is default $79.20 based on initial value given above. This is 22.0% less than the previous close and 13.5% less than the 52-week low.

Over the last decade, Payout Ratio (PR) ranges from 1.4% in ’17-’18 to 40.0% in ’20 (excluding 250% in ’22) with a last-5-year mean of 26.5%. My 10.0% forecast is near bottom of the range.

These inputs land GPN in the BUY zone with a U/D ratio of 4.0. Total Annualized Return (TAR) is 13.7%.

PAR (using Forecast Average—not High—P/E) is 10.2%, which is less than I seek for a medium-size company. If a healthy margin of safety (MOS) anchors this study, then I can proceed based on TAR instead.

To assess MOS, I compare my inputs with those of Member Sentiment (MS). Based on only eight studies done in the past 90 days (my study along with seven outliers excluded), averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, Forecast Low P/E, and PR are 5.0%, 12.0%, 29.0, 19.5, and 52.2%. My forecast P/E range is higher. Value Line projects a future average annual P/E of 22.5: lower than MS (24.3) and lower than mine (25.5).

MS high / low EPS are $7.85 / $4.69 versus my $6.35 / $3.77 (per share). My high EPS is less due to a lower initial value. Value Line’s high EPS of $7.25 is in the middle.

MS LSPF of $86.70 implies a Forecast Low P/E of 18.5: less than the above-stated 19.5. MS LSPF is 5.2% less than the default $4.69/share * 19.5 = $91.46 resulting in more conservative zoning. MS LSPF is 9.5% greater than mine, however.

With regard to valuation, PEG is 0.81 and 1.7 per Zacks and my projected P/E, respectively: fairly valued. Relative Value [(current P/E) / 5-year-mean average P/E] is quite low at 0.66.

MOS is robust because my inputs are near or below respective analyst/historical ranges and MS averages. Comparison with the latter carries little impact due to a tiny sample size, but MS TAR of 19.2% is anecdotally 5.5% per year greater than mine.

Per U/D, GPN is a BUY under $100/share. BI TAR criterion is met ~$95/share given a forecast high price ~$190.

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EEFT Stock Study (7-29-24)

Posted by on September 16, 2024 at 06:27 | Last modified: July 29, 2024 11:11

I recently did a stock study on Euronet Worldwide Inc. (EEFT) with a closing price of $100.01.

M* writes:

     > Euronet Worldwide Inc is a provider of electronic financial
     > transaction solutions. The company operates an independent network
     > of ATMs in Europe, along with a network for prepaid products such
     > as mobile top-ups, and processes point-of-sale transactions. It
     > operates in three segment EFT Processing Segment, epay Segment,
     > and Money Transfer Segment. Its segment revenue comes from by
     > [sic] operating income, electronical [sic] financial transaction
     > processing, mainly generates revenue from monthly ATM management
     > fees and currency conversion transactions. It generates the majority
     > if [sic] its geographic revenue from the United States of America.

Over the past 10 years (2020 excluded for the full analysis due to COVID-19), this medium-size company has grown sales and EPS at annualized rates of 9.2% and 7.7%, respectively. Lines are mostly up but [EPS is] not very straight or consequently parallel due to declines in ’15, ’17, and ’21. Five- and 10-year EPS R^2 are 0.00 and 0.19, respectively, and Value Line gives an Earnings Predictability score of 40. Sales, however, is a consistent upward march.

Visual inspection was initially a failure to me but excluding ’20, I can strain to accept it. A case can also be made to exclude ’21 due to COVID-19 recovery, which would improve the visual even further.

Over the past decade, PTPM leads peer averages but trails the industry while ranging from 4.5% in ’21 to 15.8% in ’19 with a last-5-year mean of 10.2%. ROE also leads peer averages but trails the industry despite increasing from 13.5% (’14) to 22.0% (’23) with a last-5-year mean of 17.9%. Debt-to-Capital is a bit higher than industry averages but lower than peers while increasing from 36.8% (’14) to 61.7% (’23) with a last-5-year mean of 55.4%.

M* reports Quick Ratio of 0.76, Interest Coverage of 7.7, and assigns a Narrow [quantitative] Economic Moat. Value Line gives a B++ grade for Financial Strength.

With regard to sales growth:

My 6.0% per year forecast is below the range.

With regard to EPS growth:

Whether the CFRA disconnect has longer-term implications, my 9.0% per year forecast is below both long-term estimates (mean 13.2%). Initial value is ’23 EPS of $5.50/share rather than 2024 Q2 EPS of $5.76 (annualized).

My Forecast High P/E is 22.0. Over the past decade, high P/E falls from 31.5 (’14) to 22.1 (’23) with a last-5-year mean (also excluding 126 in ’21) of 27.7 and a last-5-year-mean average P/E (also excluding 76.2 low P/E in ’21) of 21.3. I am below the 10-year range.

My Forecast Low P/E is 13.0. Over the past decade, low P/E falls from 19.0 (’14) to 13.4 (’23) with a last-5-year mean (also excluding 126 in ’21) of 15.0. I am forecasting below the range.

My LSPF is default $71.50 based on initial value given above. This is 28.5% less than the previous close and 3.1% less than the 52-week low.

These inputs land EEFT in the HOLD zone with a U/D ratio of 3.0. Total Annualized Return (TAR) is 13.2%.

PAR (using Forecast Average—not High—P/E) of 8.1% is less than I seek for a medium-size company. If a healthy margin of safety (MOS) anchors the study, then I can proceed based on TAR instead.

To assess MOS, I compare my inputs with those of Member Sentiment (MS). Based on only 17 studies (my study and 6 outliers excluded) over the past 90 days, averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, and Forecast Low P/E are 10.0%, 12.1%, 25.9, and 14.4, respectively. I am lower across the board. Value Line’s projected average annual P/E of 23.5 is higher than MS (20.2) and higher than mine (17.5).

MS high / low EPS are $10.13 / $5.68 versus my $8.46 / $5.50 (per share). My high EPS is less due to a lower growth rate. Value Line’s high EPS of $9.45 is in the middle.

MS LSPF of $80.50 implies a Forecast Low P/E of 14.2: less than the above-stated 14.4. MS LSPF is 1.6% less than the default $5.68/share * 14.4 = $81.79 resulting in more conservative zoning. MS LSPF is 12.6% greater than mine, however.

With regard to valuation, PEG is 1.8 per my projected P/E: slightly elevated. Relative Value [(current P/E) / 5-year-mean average P/E] is slightly low at 0.82.

MOS is robust because my inputs are below respective analyst/historical ranges and MS averages. Comparison with the latter carries less impact due to such a low sample size, but MS TAR of 19.7% is anecdotally 6.5% per year greater than mine.

Per U/D, EEFT is a BUY under $100/share. BI TAR criterion is met < $93/share given a forecast high price ~$186.

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CELH Stock Study (7-29-24)

Posted by on September 15, 2024 at 07:30 | Last modified: July 27, 2024 11:30

I recently did a stock study on Celsius Holdings Inc. (CELH) with a closing price of $48.02.

M* writes:

     > Celsius Holdings plays in the energy drink subsegment of the global
     > nonalcoholic beverage market, with 96% of revenue concentrated in
     > North America. Celsius’ products contain natural ingredients and a
     > metabolism-enhancing formulation, appealing to fitness and active
     > lifestyle enthusiasts. The firm’s portfolio includes its namesake
     > Celsius Originals beverages (including those that are naturally
     > caffeinated with stevia), Celsius Essentials line (containing
     > aminos), and Celsius On-the-Go powder packets. Celsius dedicates
     > its efforts to branding and innovation, while it utilizes third
     > parties for the manufacturing, packaging, and distribution of its
     > products. In 2022, Celsius forged a 20-year distribution agreement
     > with PepsiCo, which holds an 8.5% stake in the business.

Celsius Holdings was a pick for the Manifest Investing “Best Small Companies” portfolio last Halloween.

Although the medium-size company has been around since 2008, it actually delisted after three years before a second IPO in 2021. We do have stock data for the interim. I am excluding data through 2018 due to negative EPS.

Over the last 5 years, sales and EPS have increased at annualized rates of 108% and 19.0%, respectively. Revenue shows exponential growth but EPS is sideways, down, and suddenly high: hardly up, straight, and parallel. 5-year R^2 is 0.54 and Value Line gives an Earnings Predictability score of 35.

This company fails visual inspection, and I would limit any investment to speculative size only.

Over the past 5 years, PTPM trails peer and industry averages despite increasing from 13.3% (’19) to 22.1% (’23) with a mean of 3.5%. ROE also trails peer and industry averages despite increasing from 17.4% (’19) to 83.7% (’23) with a -45.4% mean (’22 ROE is -338%). Debt-to-Capital is much lower than peer and industry averages while decreasing from 13.0% (’19) to 0.2% (’23) with a mean of 3.0%.

M* reports Current and Quick Ratios of 4.1 and 3.4, respectively, and rates the company “Standard” for Capital Allocation. Value Line gives a B+ [extremely low, in my opinion, for a company with virtually zero debt] grade for Financial Strength.

With regard to sales growth:

My 15.0% per year forecast is below both long-term estimates.

With regard to EPS growth:

My 20.0% per year forecast is below the long-term-estimate range (mean of four: 29.4%). Initial value is ’23 EPS of $0.77/share rather than 2024 Q1 EPS of $0.91 (annualized).

My Forecast High P/E is 33.0. Over the last five years, high P/E ranges from NMF in ’22 to 2161. The only “sensible” numbers are 33.8 in ’19 and 89.5 in ’23. I am forecasting below the range.

My Forecast Low P/E is 19.0. Over the last five years, low P/E ranges from 19.2 in ’19 to 34.7 in ’23 (excluding 805 and NMF in ’21 and ’22) with a mean of 27.7. I am forecasting below the range.

My Low Stock Price Forecast (LSPF) is $33.60. Default ($17.30) based on initial value from above seems unreasonably low at 64.0% less than the previous close and 61.3% less than the 52-week low. My projection is (arbitrarily) less by 30.0% and 24.8%, respectively.

These inputs land CELH in the HOLD zone with a U/D ratio of 1.1. Total Annualized Return (TAR) is 5.7%.

PAR (using Forecast Average—not High—P/E) of 0.8% is unacceptable for any size company. If a healthy margin of safety (MOS) anchors the study, then I can proceed based on TAR instead.

To assess MOS, I compare my inputs with those of Member Sentiment (MS). Based on only 35 studies (my study and 7 outliers excluded) over the past 90 days, averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, and Forecast Low P/E are 27.0%, 24.0%, 61.7, and 27.7, respectively. I am lower across the board. Value Line’s projected average annual P/E of 35.0 is lower than MS (44.7) and much higher than mine (26.0).

MS high / low EPS are $2.58 / $0.89 versus my $1.92 / $0.91 (per share). My high EPS is less due to a lower growth rate. Value Line’s high EPS of $2.50 is greater than both.

MS LSPF of $27.20 implies a Forecast Low P/E of 30.6: greater than the above-stated 27.7. MS LSPF is 10.3% greater than the default $0.89/share * 27.7 = $24.65 resulting in more aggressive zoning. MS LSPF is 19.1% less than mine, however.

With regard to valuation, PEG is reasonable at 1.4 and 2.2 per Zacks and my projected P/E, respectively.

MOS is robust because my inputs are below respective analyst/historical ranges and MS averages. Bolstering the case is my TAR that is 13.2% per year less than MS (18.9%).

I have a couple problems with Celsius Holdings as a prospective investment. First, not enough consistent EPS or P/E history exists for me to feel comfortable making nearby, linear forecasts. Second, I can’t buy into a sky-high future P/E (currently 52.9). The M* analyst report is downright bearish about long-term chances of taking market share from industry leaders. The CFRA analyst rates “Hold” with a more bullish report. Because of all the uncertainty, I need to maintain huge MOS.

The stock trading near 52-week lows caught my eye. Unfortunately, that doesn’t turn back the clock very far because capital appreciation over the last decade has been persistently strong.

Per U/D, CELH is a BUY under $41/share. BI TAR criterion is met < $32/share given a forecast high price ~$64.

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BYD Stock Study (7-25-24)

Posted by on September 13, 2024 at 07:01 | Last modified: July 25, 2024 14:18

I recently did a stock study on Boyd Gaming Corp. (BYD) with a closing price of $57.77.

M* writes:

     > Boyd Gaming Corp is a multi-jurisdictional gaming company. The
     > company operates wholly-owned gaming entertainment properties
     > (casino space, slot machines, table games, and hotel rooms) in
     > Nevada, Illinois, Indiana, Iowa, Kansas, Louisiana, Mississippi,
     > Missouri, Ohio, and Pennsylvania. Geographical regions separate
     > its business segments: Las Vegas Locals, Downtown Las Vegas,
     > Midwest and South, and Online. Midwest and South hold the key
     > number of entertainment properties, and it generate the
     > majority of sales for the company.

Over the past 9 years (2014 excluded from analysis due to negative EPS), the medium-size company has grown sales and EPS at annualized rates of 7.7% and 33.6%, respectively (2020 excluded from analysis due to property shut downs per COVID-19 mandates). Lines are mostly up and narrowing except for sales decline in ’16 and EPS declines in ’17 and ’18. 10-year R^2 is 0.81 (with exclusions) although Value Line gives a low Earnings Predictability score of 20 (without exclusions).

Over the past 9 years (sans ’20), PTPM mostly trails peer and industry averages despite increasing from 1.8% (’15) to 20.1% (’23) with a last-5-year mean of 11.9%. ROE also trails peer and industry averages despite increasing from 9.3% (’15) to 33.5% (’23) with a last-5-year mean of 28.8%. Debt-to-Capital is higher than industry averages but lower than peers while falling from 86.6% (’15) to 68.1% (’23) with a last-5-year mean of 72.5%.

Current (Quick) Ratio is 0.80 (0.67) and Interest Coverage is 5.0 per M* who also assigns a Narrow [quantitative] Economic Moat. Value Line grades the company B+ for Financial Strength.

With regard to sales growth:

My 1.0% forecast is near bottom of the range.

With regard to EPS growth:

My 2.0% per year forecast is near bottom of the long-term-estimate range (mean of three: 8.3%). Initial value is 2024 Q1 EPS of $5.57/share (annualized) rather than ’23 EPS of $6.12.

My Forecast High P/E is 12.0. Over the past 9 years, high P/E falls from 50.5 (’15) to 11.9 (’23) with a last 5-year mean of 16.2 and a last-5-year-mean average P/E of 13.2. I am near bottom of the range (only ’23 is less).

My Forecast Low P/E is 8.0. Over the past 9 years, low P/E falls from 28.1 (’15) to 8.6 (’23) with a last 5-year mean of 10.3. I am forecasting near bottom of the range [only ’22 (7.9) is less].

My Low Stock Price Forecast (LSPF) of $44.60 is default based on initial value given above. This is 22.8% less than the previous close and 9.5% less than the 52-week low.

Over the past 9 years, Payout Ratio (PR) ranges from zero (four times including ’20) to 23.0% in ’18 with a last-5-year mean of 13.4%. Given a propensity to cut the dividend, I am discounting this to zero.

These inputs land BYD in the HOLD zone with a U/D ratio of 1.0. Total Annualized Return (TAR) is 4.5%.

PAR (using Forecast Average—not High—P/E) of 0.8% is unacceptable for any size company. If a healthy margin of safety (MOS) anchors the study, then I can proceed based on TAR but even that is less than the current yield on T-bills.

To assess MOS, I compare my inputs with those of Member Sentiment (MS). Based on only four studies in the past 90 days (my study and two outliers excluded), averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, Forecast Low P/E, and PR are 0.9%, 1.5%, 13.8, 9.2, and 13.4%, respectively. I am lower on the latter three. Value Line projects a future average annual P/E of 13.0 that is greater than MS (11.5) and greater than mine (10.0).

MS high / low EPS are $6.30 / $5.57 versus my $6.15 / $5.57 (per share). My high EPS is less due to a lower growth rate. Value Line’s high EPS of $8.30 soars above both.

MS LSPF of $44.00 implies a Forecast Low P/E of 7.9: less than the above-stated 9.2. MS LSPF is 14.1% less than the default $5.57/share * 9.2 = $51.24 resulting in more conservative zoning. MS LSPF is also 1.4% less than mine.

With regard to valuation, PEG is 5.2 per my projected P/E, respectively: grossly overvalued due to my low projected EPS growth. Relative Value [(current P/E) / 5-year-mean average P/E] is slightly low at 0.8.

I think MOS is robust because my inputs (including most-recent-quarter initial value) are near or below respective analyst/historical ranges. The MS sample is too small for meaningful comparison, but anecdotally its TAR of 13.4% is 8.9% per year greater than mine.

Quantitatively speaking, Boyd Gaming strikes me as a company with little going on. The only future flash is the Argus 18.0% (hopefully not a harbinger of how long I’ll be citing them). Looking backward, Boyd deserves a bit more credit. Per CFRA, its Debt-to-Capital is one of the best in the industry along with ROE and ROR. Forward P/E is second only to IGT and if the Argus projection comes to fruition, then I’ll bet some P/E expansion will pay out with it (pun intended albeit probably weak).

Per U/D, BYD is a BUY under $51/share. BI TAR criterion is met < $37 given a forecast high price ~$74.

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BC Stock Study (7-24-24)

Posted by on September 12, 2024 at 06:52 | Last modified: July 25, 2024 14:31

I recently did a stock study on Brunswick Corp. (BC) with a closing price of $77.17.

M* writes:

     > Brunswick is a leading manufacturer in the marine recreation
     > industry. The firm has more than 60 brands delivering products
     > across propulsion (outboard, sterndrive, and inboard engines,
     > propulsion-related controls, rigging, and propellers), parts,
     > accessories, and technology, and boats (including well-known
     > brands like Boston Whaler and Sea Ray). It also owns numerous
     > Freedom Boat Club (shared ownership) locations as well as
     > Boateka, which facilitates transactions in the used boat market.
     > Brunswick’s focus surrounds building the innovative marine and
     > recreational experiences, technologies, and connections
     > supported by quality and innovation.

Over the past 10 years, this medium-size company has grown sales and EPS at annualized rates of 5.7% and 15.8%, respectively. Lines are somewhat up, straight, and parallel except for sales/EPS declines in ’19 (big) and ’23. 5-and 10-year EPS R^2 are 0.85 and 0.69, respectively, and Value Line gives an Earnings Predictability score of 75.

Over the past decade, PTPM trails peer and industry averages through ’19 before crossing above while ranging from 2.7% in ’19 (downside outlier) to 12.6% in ’21 with a last-5-year mean of 9.7%. ROE mostly trails peer averages despite increasing from 14.9% (’14) to 20.1% (’23) with a last-5-year mean of 22.2%. Debt-to-Capital is less than peer and industry averages despite increasing from 28.0% (’14) to 55.4% (’23) with a last-5-year mean of 50.1%.

Value Line gives a B++ grade for Financial Strength and Interest Coverage of 8.0 versus 5.5 for M*. The latter reports Quick Ratio of 0.7, rates the company “Standard” for Capital Allocation, and assigns a “Narrow” Economic Moat.

With regard to sales growth:

My 2.0% per year forecast is less than both long-term estimates (notwithstanding Zacks questionable ’25 projection).

With regard to EPS growth:

My 7.0% per year forecast is below the long-term-estimate range (mean of three: 12.4%). Initial value is 2024 Q1 EPS of $5.57/share (annualized) rather than ’23 EPS of $6.13.

My Forecast High P/E is 15.0. Over the past decade, high P/E falls from 25.5 (’14) to 16.3 (’13) with a last-5-year mean (excluding 173 in ’19) of 15.3 and a last-5-year-mean average P/E of 14.1 (also excluding 114 low P/E in ’19). I am near bottom of the range [only ’22 is less (11.4)].

My Forecast Low P/E is 9.0. Over the past decade, low P/E falls from 18.6 (’14) to 10.8 (’23) with a last-5-year mean (excluding 114 in ’19) of 8.3. I am forecasting below the latter and near the range bottom [’20 (5.4) and ’22 (6.8) are less].

My Low Stock Price Forecast (LSPF) is $54.00. Default ($44.60) based on initial value seems unreasonably low at 42.2% less than previous close and 32.9% less than 52-week low. My (arbitrary) projection is 30.0% and 18.8% less, respectively.

Over the past decade, Payout Ratio (PR) ranges from 16.1% in ’22 to 32.9% in ’17 with a last-5-year mean (excluding 242% outlier in ’19) of 20.0%. I am forecasting below the range at 16.0%

These inputs land BC in the HOLD zone with a U/D ratio of 1.6. Total Annualized Return (TAR) is 9.6%.

PAR (using Forecast Average—not High—P/E) of 4.3% is less than I seek for a medium-size company. If a healthy margin of safety (MOS) anchors the study, then I can proceed based on TAR instead.

To assess MOS, I compare my inputs with those of Member Sentiment (MS). Based on only four studies (my study and two outliers excluded) over the past 90 days, averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, Forecast Low P/E, and PR are 8.0%, 8.0%, 14.4, 7.9, and 64.3%, respectively. I am higher on the P/E range. Value Line’s projected average annual P/E of 12.0 is higher than MS (11.2) and equal to mine.

MS high / low EPS are $9.01 / $6.00 versus my $7.81 / $5.57 (per share). My high EPS is less due to a lower growth rate and initial value. Value Line’s high EPS of $12.85 soars above both.

MS LSPF of $48.00 implies Forecast Low P/E of 8.0: a near match to the 7.9 above. MS LSPF is 11.1% less than mine thereby resulting in more conservative zoning.

With regard to valuation, PEG is 1.9 per my projected P/E: slightly overvalued. Relative Value [(current P/E) / 5-year-mean average P/E] is elevated at 1.2 with the two upside P/E outliers from ’19 excluded.

MOS is robust because my inputs (and most-recent-quarter initial value) are near or below respective analyst/historical ranges. MS sample is too small for meaningful comparison, but anecdotally its 15.1% TAR is 5.5%/year greater than mine.

For a more detailed look (i.e. Ann C’s “other 20%”), I could dig into past 10-Ks to better explain 2019 for possible exclusion from the visual analysis. I skipped this because I don’t feel it affects future forecasts.

Per U/D, BC is a BUY under $69/share. BI TAR criterion is met < $59/share given a forecast high price ~$117.

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NKE Stock Study (7-24-24)

Posted by on September 10, 2024 at 07:03 | Last modified: July 24, 2024 11:48

I recently did a stock study on Nike Inc. (NKE) with a closing price of $73.40.

M* writes:

     > Nike is the largest athletic footwear and apparel brand in the
     > world. Key categories include basketball, running, and football
     > (soccer). Footwear generates about two thirds of its sales.
     > Its brands include Nike, Jordan (premium athletic footwear and
     > clothing), and Converse (casual footwear). Nike sells products
     > worldwide through company-owned stores, franchised stores,
     > and third-party retailers. The firm also operates e-commerce
     > platforms in more than 40 countries. Nearly all its production is
     > outsourced to contract manufacturers in more than 30 countries.
     > Nike was founded in 1964 and is based in Beaverton, Oregon.

Over the past 10 years, this mega-size ( > $50B annual revenue) company has grown sales and EPS at annualized rates of 6.2% and 8.9%, respectively. Lines are somewhat up, straight, and parallel except for a sales/EPS decline in ’20 (FY ends May; references to year on BI website incremented to match) and additional EPS declines in ’18 and ’23. 5-year and 10-year EPS R*2 are a lackluster 0.48 and 0.43 although Value Line gives a decent Earnings Predictability score of 65.

Over the past decade, PTPM leads industry averages (data unavailable for peers) while ranging from 7.7% in ’20 (downside outlier) to 14.2% in ’21 with a last-5-year mean of 12.4%. ROE leads industry averages while climbing from 25.6% (’15) to 39.6% (’24) with a last-5-year mean of 37.6%. Debt-to-Capital is a bit higher than industry averages while increasing from 9.0% (’15) to 45.3% (’24) with a last-5-year mean of 49.8%.

Value Line gives an A+ grade for Financial Strength. M* reports Quick Ratio of 1.7, rates the company “Exemplary” for Capital Allocation, and assigns a “Wide” Economic Moat. Per 2023 10-K (2024 not yet listed on EDGAR), the interest coverage ratio is 6856 / 205 = 33.4 for ’22 and NMF for ’23 (interest received rather than paid).

With regard to sales growth:

My 3.0% forecast is below both long-term estimates.

With regard to EPS growth:

My 5.0% per year forecast is near the bottom of the long-term-estimate range (mean of five: 10.0%). Initial value is ’24 EPS of $3.73/share.

My Forecast High P/E is 24.0. Over the past decade, high P/E ranges from 24.0 in ’17 to 66.0 in ’20 (not outlier due to 62.8 in ’18) with a last-5-year mean of 45.8 and a last-5-year-mean average P/E of 37.0. I am at the range bottom.

My Forecast Low P/E is 16.0. Over the past decade, low P/E ranges from 19.5 in ’17 to 43.0 in ’18 (not outlier due to 37.5 in ’20) with a last-5-year mean of 28.1. I am forecasting below the range.

My Low Stock Price Forecast (LSPF) of $59.70 is default based on initial value given above. This is 18.7% less than the previous close and 16.2% less than the 52-week low.

Over the past decade, Payout Ratio (PR) ranges from 27.9% in ’17 to 66.7% in ’18 with a last-5-year mean of 40.3%. I am forecasting below the range at 27.0%.

These inputs land NKE in the HOLD zone with a U/D ratio of 3.0. Total Annualized Return (TAR) is 10.4%.

PAR (using Forecast Average—not High—P/E) of 6.7% is less than I seek for a mega-size company. If a healthy margin of safety (MOS) anchors the study, then I can proceed based on TAR instead.

To assess MOS, I compare my inputs with those of Member Sentiment (MS). Based on 84 studies (my study and 33 other outliers excluded) over the past 90 days, averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, Forecast Low P/E, and PR are 4.3%, 9.5%, 31.1, 23.2, and 39.4%, respectively. I am lower across the board. Value Line’s projected average annual P/E of 22.0 is lower than MS (27.2) and higher than mine (20.0).

MS high / low EPS are $5.61 / $3.42 versus my $4.76 / $3.73 (per share). My high EPS is less due to a lower growth rate. Value Line’s high EPS of $6.00 is greater than both.

MS LSPF of $73.30 implies a Forecast Low P/E of 21.4: less than the above-stated 23.2. MS LSPF is 7.6% less than the default $3.42/share * 23.2 = $79.34 (INVALID on today’s date) resulting in more conservative zoning. MS LSPF is 22.8% greater than mine, however.

With regard to valuation, PEG is 1.9 and 3.7 per Zacks and my projected P/E, respectively: somewhat rich. Relative Value [(current P/E) / 5-year-mean average P/E] is dirt cheap at 0.53.

MOS is robust because my inputs are near or below respective analyst/historical ranges and MS averages. Consistent with this is MS TAR of 17.9% that is 7.3% per year greater than mine.

Per U/D, NKE is a BUY under $73/share. BI TAR criterion is met < $57/share given a forecast high price ~$114.

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IPG Stock Study (7-23-24)

Posted by on September 9, 2024 at 06:47 | Last modified: July 24, 2024 11:41

I recently did a stock study on Interpublic Group, Inc. (IPG) with a closing price of $29.67.

M* writes:

     > Interpublic Group is among the world’s largest advertising
     > holding companies based on annual revenue. It provides
     > traditional advertising services along with digital and
     > other services such as public relations through various
     > acquisitions. IPG has made these services available in
     > over 100 countries. The company generates about 65% of
     > revenue in the US and 17% in the UK and Europe.

Over the past 10 years, this large-size company has grown sales and EPS at annualized rates of 4.7% and 9.4%, respectively. Lines are mostly up, straight, and parallel except for sales dips in ’20 and ’23 and EPS declines in ’15, ’17, ’20 (large due to COVID), and ’22. EPS R^2 is ~0.50 for 5-year and 10-year time frames.

Over the past decade, PTPM trails peers and is about even with the industry despite increasing from 9.6% (’14) to 12.9% (’23) with a last-5-year mean of 9.8%. ROE also trails peers and is about even with the industry despite increasing from 22.3% (’14) to 29.3% (’23) with a last-5-year mean of 25.0%. Debt-to-Capital is lower than peer and industry averages despite increasing from 45.0% (’14) to 54.2% (’23) with a last-5-year mean of 59.1%.

Quick Ratio is 1.0 and Interest Coverage is 6.8 per M* who rates the company “Exemplary” for Capital Allocation. Value Line grades the company B++ for Financial Strength.

With regard to sales growth:

My 1.0% forecast is well below the long-term estimate due to some [much] lower short-term projections.

With regard to EPS growth:

My 1.0% per year forecast is near the bottom of the long-term-estimate range (mean of five: 4.1%). Initial value is 2024 Q1 EPS of $2.81/share (annualized) rather than ’23 EPS of $2.85.

My Forecast High P/E is 14.0. Over the past decade, high P/E decreases from 18.9 (’14) to 14.4 (’23) with a last 5-year mean (excluding 28.3 in COVID-afflicted 2020) of 15.5 and a last-5-year-mean average P/E of 13.2. I am below the 10-year range.

My Forecast Low P/E is 8.0. Over the past decade, low P/E decreases from 14.2 (’14) to 9.5 (’23) with a last 5-year mean of 10.9. I am forecasting below the range.

My Low Stock Price Forecast of $22.50 is default based on initial value given above. This is 24.2% less than the previous close and 17.3% less than the 52-week low.

Over the past decade, Payout Ratio ranges from 33.9% in ’14 to 56.0% in ’19 (excluding 114% in COVID-afflicted 2020) for a last-5-year mean of 48.4%. I am forecasting below the range at 33.0%.

These inputs land IPG in the HOLD zone with a U/D ratio of 1.6. Total Annualized Return (TAR) is 9.2%.

PAR (using Forecast Average—not High—P/E) of 4.8% is less than I seek for a large-size company. If a healthy margin of safety (MOS) anchors the study, then I can proceed based on TAR instead.

To assess MOS, I compare my inputs with those of Member Sentiment (MS). Aside from my own, however, only one other study has been done over the past 90 days. My inputs for projected sales growth, projected EPS growth, Forecast High P/E, and Forecast Low P/E are all lower.

Value Line projects a future average annual P/E of 17.0 that is much greater than mine (11.0). Value Line’s high EPS of $3.50/share is higher than my $2.81.

With regard to valuation, PEG is 3.2 and 10.4 (i.e. NMF) per Zacks and my projected P/E, respectively: overvalued. Relative Value [(current P/E) / 5-year-mean average P/E] is slightly low at 0.80.

I think MOS is robust because my inputs are near or below respective analyst (Value Line and others) and historical ranges. I especially lowball projected EPS growth and use a lower most-recent quarterly EPS for initial value.

The biggest strike against Interpublic Group may be its low sales growth as the engine driving stock appreciation. Management metrics and trends also suggest lack of industry leadership. The dividend is strong albeit well-discounted in the current study. If shares drop low enough price then I may be interested, but this is more a lingering personal preference than BI stock selection methodology.

Per U/D, IPG is a BUY under $27/share. BI TAR criterion is met < $21 given a forecast high price ~$41.

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FOXF Stock Study (7-22-24)

Posted by on September 7, 2024 at 06:39 | Last modified: July 22, 2024 11:13

I recently did a stock study on Fox Factory Holding Corp. (FOXF) with a closing price of $48.00. The previous study is here.

Value Line writes:

     > Fox Factory Holding Corp. designs, engineers, manufactures, and
     > markets performance ride dynamics products for customers
     > worldwide. Fox Factory Holding is the holding company of Fox
     > Factory, Inc. The company’s premium brand ride dynamics products
     > are used primarily on bicycles, side-by-side vehicles, onroad
     > vehicles with off-road capabilities, off-road vehicles and
     > trucks, all-terrain vehicles, snowmobiles, specialty vehicles
     > and applications, and motorcycles.

Over the past 10 years, this medium-size company has grown sales and EPS at annualized rates of 21.6% and 24.0%, respectively. Lines are mostly up, straight, and parallel except for a sales decline in ’23 and EPS declines in ’15, ’20, and ’23. The latter seems more sizable and is mostly responsible for 10-year R^2 of 0.86 versus 5-year R^2 of 0.30. I will be looking for an imminent turnaround to preserve integrity of the visual inspection.

Over the past decade, PTPM leads peer and industry averages despite falling from 11.2% (’14) to 9.5% (’23) with a last-5-year mean of 13.0%. ROE also leads peer and industry averages despite falling from 21.7% (’14) to 9.6% (’23) with a last-5-year mean of 17.0%. Debt-to-Capital is lower than peer and industry averages despite increasing from 28.0% (’14) to 38.3% (’23) with a last-5-year mean of 27.0%.

Quick Ratio per M* is 1.1 but Interest Coverage is only 3.8. Value Line grades the company B+ for Financial Strength and writes in its analyst note: “the company is in decent financial shape… expected strong cash flow over the coming years should be more than sufficient to cover capital expenditures.”

With regard to sales growth:

My 5.0% forecast is below the range.

With regard to EPS growth:

I am forecasting below the long-term-estimate range (mean of four: 13.3%). Initial value is 2024 Q1 EPS of $1.79/share (annualized) rather than ’23 EPS of $2.85.

My Forecast High P/E is 29.0. Over the past decade, high P/E increases from 26.1 (’14) to 44.8 (’23) with a last 5-year mean of 43.4 and a last-5-year-mean average P/E of 31.3. I am near the bottom of the range (only ’14 is less).

My Forecast Low P/E is 15.0. Over the past decade, low P/E ranges from 14.3 in ’22 to 26.3 in ’21 with a last 5-year mean of 19.2. I am forecasting near the bottom of the range (only ’14 is less).

My Low Stock Price Forecast (LSPF) is $34.00. Default ($26.90) based on initial value from above seems unreasonably low at 44.0% less than the previous close and 29.2% less than the 52-week low. My projection (arbitrary) is lower by 29.2% and 10.5%, respectively.

These inputs land FOXF in the HOLD zone with an U/D ratio of 2.3. Total Annualized Return (TAR) is 10.7%.

PAR (using Forecast Average—not High—P/E) of 4.7% is less than I seek for a medium-size company. If a healthy margin of safety (MOS) anchors the study, then I can proceed based on TAR instead.

To assess MOS, I compare my inputs with those of Member Sentiment (MS). Based on only 24 studies in the past 90 days (my study and 7 outliers excluded), averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, and Forecast Low P/E are 8.5%, 12.0%, 31.5, and 17.2, respectively. I am lower across the board. Value Line projects a future average annual P/E of 22.0 that is less than MS (24.4) and equal to mine.

MS high / low EPS are $3.15 / $1.79 versus my $2.75 / $1.79 (per share). My high EPS is less due to a lower growth rate. Value Line’s high EPS of $6.00 soars above both.

MS LSPF of $31.30 implies a Forecast Low P/E of 17.5: just greater than the above-stated 17.2. MS LSPF is 1.7% greater than the default $1.79/share * 17.2 = $30.79 resulting in more aggressive zoning. MS LSPF is 7.9% less than mine, however.

With regard to valuation, PEG is 2.0 and 2.7 per Zacks and my projected P/E, respectively: slightly overvalued on average. Relative Value [(current P/E) / 5-year-mean average P/E] is slightly low at 0.86.

I think MOS is robust because my inputs (especially most-recent-quarter initial value) are near or below respective analyst/historical ranges. Comparison with MS is limited because of the small sample size, but I am lower than those inputs too. As anecdotal reference, MS TAR of 19.9% is 9.2% per year greater than mine.

Per U/D, FOXF is a BUY under $45/share. BI TAR criterion is met < $40 given a forecast high price ~$80.

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SKX Stock Study (7-18-24)

Posted by on September 5, 2024 at 06:26 | Last modified: July 18, 2024 11:31

I recently did a stock study on Sketchers USA Inc. (SKX) with a closing price of $65.28.

M* writes:

     > Skechers USA Inc is a lifestyle footwear company under the
     > Skechers GO brand name. Products offered include various
     > styles of women’s shoes, men’s shoes, girl’s shoes, boy’s
     > shoes, performance shoes, and work shoes. Allied products
     > offered are apparel, bags, eyewear, toys, and more. Its
     > products are available for sale at department and specialty
     > stores, athletic and independent retailers, boutiques, and
     > internet retailers. The company’s operating segments
     > includes Wholesale and Direct-to-Consumer. It generates
     > maximum revenue from the Wholesale segment.

Over the past 10 years, this large-size company has grown sales and EPS at annualized rates of 13.0% and 12.4%, respectively. Lines are mostly up, straight, and parallel except for a sales + EPS decline in ’20 and additional EPS dips in ’17 and ’22. 5-year and 10-year EPS R*2 of 0.21 and 0.34, respectively (improves to 0.60 and 0.81 if ’20 and ’21 are excluded), are poor in support of Value Line’s lackluster Earnings Predictability score of 40.

Over the past decade, PTPM leads peer averages but trails the industry in ranging from 7.0% in ’22 to 10.6% in ’15 with a last-5-year mean (excluding 3.4% in ’20) of 9.0%. ROE also leads peer averages while trailing the industry in ranging from 4.1% in ’20 to 26.0% in ’21 with a last-5-year mean of 14.0%. Debt-to-Capital is less than peer and industry averages with a last-5-year mean of 35.0%.

Value Line gives a B++ grade for Financial Strength and Interest Coverage of 33.1. M* reports Quick Ratio of 1.4 and assigns a “Narrow” Economic Moat [quantitative] to the company.

With regard to sales growth:

I am forecasting below the range (assuming the aforementioned is in error) at 7.0% per year.

With regard to EPS growth:

My 11.0% forecast is below the long-term-estimate range (mean of four: 17.4%). Initial value is ’23 EPS of $3.49/share rather than 2024 Q1 EPS of $3.80 (annualized).

My Forecast High P/E is 18.0. Over the past decade, high P/E decreases from 23.8 (’14) to 18.3 (’23) with a last-5-year mean (excluding 69.5 in ’20) of 17.7 and a last-5-year-mean average P/E of 14.1. I am near bottom of the range [’18 is less (11.8)].

My Forecast Low P/E is 9.0. Over the past decade, low P/E ranges from 7.2 in ’21 to 19.6 in ’17 with a last-5-year mean (excluding 26.7 in ’20) of 10.5. I am forecasting near bottom of the range (only ’21 is less).

My Low Stock Price Forecast (LSPF) is $45.60. Default ($31.40) based on initial value from above seems unreasonably low at 51.9% less than the previous close and 31.1% less than the 52-week low. Instead, I am using the 52-week low: 30.1% less than the previous close.

These inputs land SKX in the HOLD zone with a U/D ratio of 1.2. Total Annualized Return (TAR) is 10.1%.

PAR (using Forecast Average—not High—P/E) of 4.0% is less than I seek for a medium-size company. If a healthy margin of safety (MOS) anchors this study, then I can proceed based on TAR instead.

To assess MOS, I compare my inputs with those of Member Sentiment (MS). Based on 73 studies (my study and 43 outliers excluded) over the past 90 days, averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, and Forecast Low P/E are 10.5%, 11.4%, 18.0, and 11.0, respectively. I am equal on Forecast High P/E and lower on the rest. Value Line’s projected average annual P/E of 17.0 is higher than MS (14.5) and higher than mine (13.5).

MS high / low EPS are $6.43 / $3.67 versus my $5.88 / $3.49 (per share). My high EPS is less due to a lower growth rate. Value Line’s high EPS of $6.85 is greater than both.

MS LSPF of $43.00 implies a Forecast Low P/E of 11.7: greater than the above-stated 11.0. MS LSPF is 6.5% greater than the default $3.67/share * 11.0 = $40.37 resulting in more aggressive zoning. MS LSPF is 5.7% less than mine, however.

With regard to valuation, PEG is 0.93 and 1.4 per Zacks and my projected P/E, respectively: fairly valued. Relative Value [(current P/E) / 5-year-mean average P/E] is elevated at 1.22.

MOS is robust because my inputs (including most-recent-quarter initial value) are near or below respective analyst/historical ranges and MS averages. Despite all this, MS TAR of 11.5% is only 1.0% per year greater than mine.

As flagged in an audit note, my Forecast High P/E exceeds the 5-year average P/E. Excluding ’20 (unusually high due to COVID) but including ’21 (unusually low as stock price rebounded) is the cause, which also pushes Relative Value higher.

For a company with pretty good fundamentals, the biggest detriment is ~22% stock appreciation over the last year.

Per U/D, SKX is a BUY under $50/share. BI TAR criterion is met < $53/share (puzzling to see the latter exceed the former) given a forecast high ~$106.

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