Initial Observations on Skechers (SKX)

Derived from Piotroski screen

Observations

  • Trading at less than 50% of its 52-week high resulting from missing Q3 earnings
  • International sales comprises of 40% of revenue, near its 50% target
  • Correction (presumably) derives from negative sentiment associated with soft consumer discretionary products (driven by low oil prices) for Apparel, Accessories and Footwear
  • Revenue growth of > 20%
  • $4.5bn market cap, net debt negative
  • Relatively cheap shoes (versus Under Armour, Nike)
  • NTM P/E: Current of 13.5x; Average of 19x; High of 28x
  • EPS expected to double from $1.50 / sh to $3.00 / sh

Analyze

  • Dividends / repurchases
  • Sensitize EPS