Buy gold, crypto and China, tread carefully on rich U.S. tech: BofA’s Hartnett
On Tuesday, DA Davidson analysts reiterated their Buy rating for Citi Trends stock (NASDAQ: CTRN), maintaining a price target of $29.00. Trading at $27.01 with a market capitalization of $215 million, the stock appears overvalued according to InvestingPro Fair Value metrics. The decision follows the company’s first-quarter 2025 financial results, which exceeded both consensus estimates and the analysts’ expectations.
Citi Trends reported a strong performance in its first quarter, achieving its best non-COVID comparable sales since the fourth quarter of 2024. The company’s comparable sales and gross margins, currently at 37.2%, surpassed consensus forecasts, leading to a higher-than-expected EBITDA. Additionally, Citi Trends increased its guidance, making it one of only two companies in DA Davidson’s coverage to do so this earnings season. InvestingPro analysis reveals significant debt burden concerns, with 6 additional key insights available for subscribers.
The analysts highlighted Citi Trends as part of their S.T.A.M.P.E.D.E. special situations product, specifically under the "Management Change" category. This classification reflects the company’s ongoing internally driven turnaround efforts.
Citi Trends’ positive performance this quarter underscores the impact of its strategic initiatives, which have resonated well with investors. The company’s ability to exceed expectations across key financial metrics has reinforced DA Davidson’s confidence in its future prospects.
The maintained Buy rating and stable price target reflect DA Davidson’s optimism about Citi Trends’ continued growth and its potential to capitalize on its recent momentum.
In other recent news, Citi Trends Inc. reported impressive first-quarter results, surpassing both earnings and revenue expectations. The company posted an adjusted earnings per share of $0.17, significantly outperforming analyst estimates of a $0.27 loss per share. Revenue reached $201.7 million, exceeding the anticipated $194.81 million. Comparable store sales experienced a 9.9% increase year-over-year, attributed to higher traffic, basket size, and conversion rates, with total sales rising 8.3% compared to the previous year. Citi Trends also expanded its gross margin by 90 basis points to 39.6%, aided by higher initial markups and reduced freight costs. The company generated an adjusted EBITDA of $5.4 million, a notable improvement from the previous year’s adjusted EBITDA loss of $0.8 million. In light of these results, Citi Trends raised its full-year outlook, now projecting mid-single-digit comparable store sales growth and EBITDA between $6 million and $10 million. The retailer plans to open up to five new stores and remodel approximately 50 locations this fiscal year.
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