Robinhood shares gain on Q2 beat, as user and crypto growth accelerate
On Thursday, Evercore ISI analyst Michael Binetti increased the price target for Canada Goose shares (NYSE:GOOS) to $11, up from the previous $10, while maintaining an In Line rating. The stock, currently trading at $10.67 with a market capitalization of $1.03 billion, has shown impressive momentum with a 17.5% gain over the past week. According to InvestingPro analysis, the company appears slightly undervalued based on its Fair Value model. The adjustment came after the luxury apparel maker reported a strong finish to the winter season, with fourth-quarter earnings per share (EPS) of $0.33, surpassing both Wall Street’s expectations of $0.23 and Evercore ISI’s estimate of $0.25.
Canada Goose’s total revenue for the quarter grew by 4% year-over-year, excluding foreign exchange impacts, consistent with its trailing twelve-month revenue growth of 4.16%. A notable highlight was the significant improvement in global same-store sales (SSS), which rose to 6.8%, marking the best comparable sales since June 2023. The company maintains strong financial health with a comfortable current ratio of 2.01, indicating solid liquidity to meet short-term obligations. The positive trend in same-store sales is expected to continue into the first quarter of fiscal year 2026.
The company’s gross margins also showed strength, increasing by 560 basis points to 71.3%. This improvement was attributed to a better direct-to-consumer (DTC) mix, reduced inventory provisioning, and fewer discounts through friends and family sales. Binetti acknowledged that while some of the positive performance could be related to broader industry success, as seen with competitors like The North Face, Timberland, and Arcteryx, who all exceeded expectations, Canada Goose’s recent product enhancements and store execution improvements contributed significantly to the sales acceleration.
However, Canada Goose indicated that it expects to see higher selling, general, and administrative (SG&A) expenses in fiscal year 2026, primarily due to increased marketing efforts. This anticipated rise in costs is likely to limit upward revisions to consensus EPS forecasts, which keeps Evercore ISI from increasing their EPS estimates for fiscal years 2026 and 2027.
In conclusion, despite the strong performance in the fourth quarter, Evercore ISI remains cautious about the potential for higher expenses in the coming year and maintains an In Line rating for Canada Goose stock, albeit with a slightly higher price target of $11. The stock currently trades at a P/E ratio of 12.8x, suggesting an attractive valuation relative to its growth potential. For deeper insights into Canada Goose’s valuation and eight additional exclusive ProTips, visit InvestingPro, where you’ll find comprehensive analysis and the detailed Pro Research Report available for over 1,400 US stocks.
In other recent news, Canada Goose Holdings Inc . reported strong fourth-quarter results, surpassing analyst expectations. The company posted adjusted earnings per share of C$0.33, outperforming the anticipated C$0.16. Revenue for the quarter rose by 7.4% year-over-year to C$384.6 million, exceeding the forecasted C$355.05 million. Direct-to-consumer revenue saw a significant increase of 15.7% to C$314.1 million, driven by growth in comparable sales and new store openings. However, wholesale revenue experienced a decline of 23.2% due to a lower planned order book in certain regions and shipment timing.
Despite the positive financial results, Williams Trading downgraded Canada Goose stock from Hold to Sell, setting a price target of Cdn$10.00. The downgrade followed the company’s strong performance, which the analyst attributed more to favorable weather conditions rather than fundamental improvements. The analyst expressed skepticism about the sustainability of the company’s growth, citing concerns about the brand’s diversification strategy. Investors are now considering the implications of the downgrade alongside the company’s robust financial performance.
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