We assign a fundamental rating of 3 out of 10 to COTY. COTY was compared to 36 industry peers in the Personal Care Products industry. COTY has a medium profitability rating, but doesn't score so well on its financial health evaluation. COTY has a bad growth rate and is valued cheaply.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

COTY had positive earnings in the past year.
In the past year COTY had a positive cash flow from operations.
In multiple years COTY reported negative net income over the last 5 years.
In the past 5 years COTY always reported a positive cash flow from operatings.

1.2 Ratios

With a Return On Assets value of -3.28%, COTY is not doing good in the industry: 61.11% of the companies in the same industry are doing better.
The Return On Equity of COTY (-10.87%) is comparable to the rest of the industry.
Looking at the Return On Invested Capital, with a value of 4.11%, COTY is in line with its industry, outperforming 58.33% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for COTY is significantly below the industry average of 11.85%.

		Industry Rank	Sector Rank
ROA	-3.28%
ROE	-10.87%
ROIC	4.11%

ROA(3y)0.45%

ROA(5y)-0.07%

ROE(3y)1.41%

ROE(5y)-0.89%

ROIC(3y)4.63%

ROIC(5y)3.5%

1.3 Margins

The Operating Margin of COTY (8.53%) is better than 66.67% of its industry peers.
COTY's Operating Margin has improved in the last couple of years.
COTY has a Gross Margin (64.82%) which is in line with its industry peers.
COTY's Gross Margin has improved in the last couple of years.

		Industry Rank	Sector Rank
OM	8.53%
PM (TTM)	N/A
GM	64.82%

OM growth 3Y18.53%

OM growth 5YN/A

PM growth 3YN/A

PM growth 5YN/A

GM growth 3Y0.71%

GM growth 5Y2.3%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), COTY is destroying value.
Compared to 1 year ago, COTY has more shares outstanding
The number of shares outstanding for COTY has been increased compared to 5 years ago.
The debt/assets ratio for COTY is higher compared to a year ago.

2.2 Solvency

COTY has an Altman-Z score of 0.17. This is a bad value and indicates that COTY is not financially healthy and even has some risk of bankruptcy.
With a Altman-Z score value of 0.17, COTY is not doing good in the industry: 75.00% of the companies in the same industry are doing better.
COTY has a debt to FCF ratio of 14.03. This is a negative value and a sign of low solvency as COTY would need 14.03 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 14.03, COTY is in line with its industry, outperforming 52.78% of the companies in the same industry.
A Debt/Equity ratio of 1.14 is on the high side and indicates that COTY has dependencies on debt financing.
COTY's Debt to Equity ratio of 1.14 is on the low side compared to the rest of the industry. COTY is outperformed by 63.89% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	1.14
Debt/FCF	14.03
Altman-Z	0.17

ROIC/WACC0.56

WACC7.39%

2.3 Liquidity

COTY has a Current Ratio of 0.85. This is a bad value and indicates that COTY is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Current ratio value of 0.85, COTY is not doing good in the industry: 80.56% of the companies in the same industry are doing better.
A Quick Ratio of 0.54 indicates that COTY may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.54, COTY is doing worse than 80.56% of the companies in the same industry.

		Industry Rank	Sector Rank
Current Ratio	0.85
Quick Ratio	0.54

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

The earnings per share for COTY have decreased strongly by -54.76% in the last year.
The Earnings Per Share has been decreasing by -6.60% on average over the past years.
Looking at the last year, COTY shows a decrease in Revenue. The Revenue has decreased by -5.70% in the last year.
Measured over the past years, COTY shows a small growth in Revenue. The Revenue has been growing by 4.55% on average per year.

EPS 1Y (TTM)-54.76%

EPS 3Y-6.6%

EPS 5YN/A

EPS Q2Q%-20%

Revenue 1Y (TTM)-5.7%

Revenue growth 3Y3.57%

Revenue growth 5Y4.55%

Sales Q2Q%-5.64%

3.2 Future

The Earnings Per Share is expected to grow by 24.69% on average over the next years. This is a very strong growth
The Revenue is expected to grow by 1.42% on average over the next years.

EPS Next Y98.63%

EPS Next 2Y50.17%

EPS Next 3Y34.56%

EPS Next 5Y24.69%

Revenue Next Year0.6%

Revenue Next 2Y1.47%

Revenue Next 3Y1.58%

Revenue Next 5Y1.42%

3.3 Evolution

The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 16.37, the valuation of COTY can be described as correct.
Based on the Price/Earnings ratio, COTY is valued a bit cheaper than the industry average as 75.00% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of COTY to the average of the S&P500 Index (28.39), we can say COTY is valued slightly cheaper.
The Price/Forward Earnings ratio is 6.27, which indicates a rather cheap valuation of COTY.
Based on the Price/Forward Earnings ratio, COTY is valued cheaply inside the industry as 94.44% of the companies are valued more expensively.
COTY's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 25.72.

		Industry Rank	Sector Rank
PE	16.37
Fwd PE	6.27

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of COTY indicates a somewhat cheap valuation: COTY is cheaper than 77.78% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, COTY is valued cheaper than 91.67% of the companies in the same industry.

		Industry Rank	Sector Rank
P/FCF	9.16
EV/EBITDA	7.32

4.3 Compensation for Growth

COTY's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
A more expensive valuation may be justified as COTY's earnings are expected to grow with 34.56% in the coming years.