Skechers Surpasses Market Averages with Impressive Quarterly Earnings Expectations
The recent trading session saw Skechers (SKX) closing at $70.09, marking a significant +1.13% increase from its previous day's close. This upward trend is all the more notable considering the broader market indices experienced losses. The S&P 500 dropped by 1.54%, while both the Dow and Nasdaq suffered declines of 1.63%. Skechers' resilience in this environment demonstrates the strength of the company.
The stock's performance over the past month reveals a decline of 1.13%, which is less severe compared to the losses incurred by the Consumer Discretionary sector (-4.47%) and the S&P 500 (-2.20%). This indicates that despite the broader market's downturn, Skechers has managed to maintain its footing.
The upcoming earnings release for Skechers will be a significant event for investors. The company is scheduled to announce its quarterly results on February 6, 2025. Analysts anticipate that the earnings per share (EPS) will reach $0.73, representing a notable 30.36% increase compared to the same quarter last year. Concurrently, the Zacks Consensus Estimate projects revenue at $2.22 billion, reflecting a 13.04% surge from the previous year's period.
Investors should also pay attention to any recent adjustments in analyst estimates for Skechers. These updates often reflect changes in the short-term dynamics of business patterns and can serve as an indicator of analyst optimism regarding the company's profitability. Positive estimate revisions are generally accompanied by a rise in stock price performance, especially when considering the near future.
Our research indicates that these revisions are directly correlated with future stock price movements. Therefore, investors can leverage the Zacks Rank to capitalize on this information. The Zacks Rank system considers these changes and provides an actionable rating system that ranges from #1 (Strong Buy) to #5 (Strong Sell).
The model has been proven effective, with #1-rated stocks returning an average of +25% annually since 1988. Over the past month, there have been no adjustments in the Zacks Consensus EPS estimate for Skechers. Currently, the company holds a Zacks Rank of #2 (Buy), indicating its potential for future growth.
In terms of valuation, Skechers is currently being traded at a Forward P/E ratio of 14.36. This figure aligns with the industry's average Forward P/E ratio of 14.36, suggesting no notable deviation in this regard.
Moreover, we can observe that SKX boasts a PEG ratio of 0.85. This metric, similar to the famous P/E ratio, considers both the stock price and its expected earnings growth rate. As of the close of trade yesterday, the Shoes and Retail Apparel industry had an average PEG ratio of 1.71.
The Shoes and Retail Apparel industry is part of the Consumer Discretionary sector. This industry currently holds a Zacks Industry Rank of 165, placing it in the bottom 35% of all 250+ industries evaluated by our rating system.
The Zacks Industry Rank assesses the performance of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming these groups. Our research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Conclusion
Skechers' impressive quarterly earnings expectations, combined with its resilience in a market experiencing declines, make it an attractive investment opportunity for those looking to capitalize on future growth. As always, we recommend monitoring these stock-moving metrics and other key indicators through Zacks.com in the upcoming trading sessions.
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