VICTORIA'S SECRET & CO (VSCO) Stock Fundamental Analysis
NYSE:VSCO - New York Stock Exchange, Inc. - US9264001028 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to VSCO. VSCO was compared to 121 industry peers in the Specialty Retail industry. There are concerns on the financial health of VSCO while its profitability can be described as average. A decent growth rate in combination with a cheap valuation! Better keep an eye on VSCO.
1. Profitability
1.1 Basic Checks
In the past year VSCO was profitable.
In the past year VSCO had a positive cash flow from operations.
VSCO had positive earnings in 4 of the past 5 years.
In the past 5 years VSCO always reported a positive cash flow from operatings.
1.2 Ratios
VSCO's Return On Assets of 3.65% is fine compared to the rest of the industry. VSCO outperforms 61.98% of its industry peers.
VSCO has a Return On Equity of 25.89%. This is amongst the best in the industry. VSCO outperforms 81.82% of its industry peers.
Looking at the Return On Invested Capital, with a value of 6.64%, VSCO is in the better half of the industry, outperforming 64.46% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for VSCO is below the industry average of 13.07%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.65% | ||
| ROE | 25.89% | ||
| ROIC | 6.64% |
ROA(3y)4.47%
ROA(5y)5.31%
ROE(3y)47.59%
ROE(5y)77.21%
ROIC(3y)9.17%
ROIC(5y)N/A
1.3 Margins
The Profit Margin of VSCO (2.68%) is better than 66.12% of its industry peers.
In the last couple of years the Profit Margin of VSCO has declined.
VSCO has a better Operating Margin (4.56%) than 66.12% of its industry peers.
VSCO's Operating Margin has declined in the last couple of years.
VSCO has a Gross Margin (35.95%) which is comparable to the rest of the industry.
In the last couple of years the Gross Margin of VSCO has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.56% | ||
| PM (TTM) | 2.68% | ||
| GM | 35.95% |
OM growth 3Y-28.61%
OM growth 5YN/A
PM growth 3Y-34.72%
PM growth 5YN/A
GM growth 3Y-3.67%
GM growth 5Y5.76%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), VSCO is destroying value.
The number of shares outstanding for VSCO has been increased compared to 1 year ago.
Compared to 5 years ago, VSCO has less shares outstanding
The debt/assets ratio for VSCO has been reduced compared to a year ago.
2.2 Solvency
VSCO has an Altman-Z score of 1.97. This is not the best score and indicates that VSCO is in the grey zone with still only limited risk for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 1.97, VSCO is in line with its industry, outperforming 46.28% of the companies in the same industry.
The Debt to FCF ratio of VSCO is 5.18, which is a neutral value as it means it would take VSCO, 5.18 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 5.18, VSCO is doing good in the industry, outperforming 66.12% of the companies in the same industry.
VSCO has a Debt/Equity ratio of 1.67. This is a high value indicating a heavy dependency on external financing.
With a Debt to Equity ratio value of 1.67, VSCO is not doing good in the industry: 66.94% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.67 | ||
| Debt/FCF | 5.18 | ||
| Altman-Z | 1.97 |
ROIC/WACC0.7
WACC9.54%
2.3 Liquidity
A Current Ratio of 1.16 indicates that VSCO should not have too much problems paying its short term obligations.
VSCO has a Current ratio of 1.16. This is in the lower half of the industry: VSCO underperforms 64.46% of its industry peers.
VSCO has a Quick Ratio of 1.16. This is a bad value and indicates that VSCO is not financially healthy enough and could expect problems in meeting its short term obligations.
VSCO's Quick ratio of 0.33 is on the low side compared to the rest of the industry. VSCO is outperformed by 66.94% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.16 | ||
| Quick Ratio | 0.33 |
3. Growth
3.1 Past
VSCO shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 16.96%, which is quite good.
The earnings per share for VSCO have been decreasing by -25.48% on average. This is quite bad
Looking at the last year, VSCO shows a small growth in Revenue. The Revenue has grown by 1.45% in the last year.
Measured over the past years, VSCO shows a decrease in Revenue. The Revenue has been decreasing by -3.67% on average per year.
EPS 1Y (TTM)16.96%
EPS 3Y-25.48%
EPS 5YN/A
EPS Q2Q%50.68%
Revenue 1Y (TTM)1.45%
Revenue growth 3Y-2.8%
Revenue growth 5Y-3.67%
Sales Q2Q%-0.47%
3.2 Future
The Earnings Per Share is expected to grow by 0.39% on average over the next years.
The Revenue is expected to grow by 1.11% on average over the next years.
EPS Next Y-20.84%
EPS Next 2Y-6.56%
EPS Next 3Y0.39%
EPS Next 5YN/A
Revenue Next Year0.58%
Revenue Next 2Y1.18%
Revenue Next 3Y1.11%
Revenue Next 5YN/A
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 accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 7.85, the valuation of VSCO can be described as very cheap.
92.56% of the companies in the same industry are more expensive than VSCO, based on the Price/Earnings ratio.
VSCO's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.45.
With a Price/Forward Earnings ratio of 8.99, the valuation of VSCO can be described as very reasonable.
86.78% of the companies in the same industry are more expensive than VSCO, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.90, VSCO is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.85 | ||
| Fwd PE | 8.99 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, VSCO is valued cheaper than 85.12% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, VSCO is valued cheaper than 90.08% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.86 | ||
| EV/EBITDA | 4.8 |
4.3 Compensation for Growth
The decent profitability rating of VSCO may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-6.56%
EPS Next 3Y0.39%
5. Dividend
5.1 Amount
VSCO does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
20.57
+0.17 (+0.83%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners92.23%
Inst Owner Change3.23%
Ins Owners0.94%
Ins Owner Change0.39%
Market Cap1.64B
Analysts55
Price Target23.13 (12.45%)
Short Float %17.66%
Short Ratio3.73
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)N/A
Avg EPS beat(2)N/A
Min EPS beat(2)N/A
Max EPS beat(2)N/A
EPS beat(4)N/A
Avg EPS beat(4)N/A
Min EPS beat(4)N/A
Max EPS beat(4)N/A
EPS beat(8)N/A
Avg EPS beat(8)N/A
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)0
Avg Revenue beat(2)-1.32%
Min Revenue beat(2)-1.53%
Max Revenue beat(2)-1.1%
Revenue beat(4)1
Avg Revenue beat(4)-0.45%
Min Revenue beat(4)-1.53%
Max Revenue beat(4)2.08%
Revenue beat(8)1
Avg Revenue beat(8)-1.37%
Revenue beat(12)1
Avg Revenue beat(12)-1.9%
Revenue beat(16)1
Avg Revenue beat(16)-2.25%
PT rev (1m)-12.46%
PT rev (3m)-20.29%
EPS NQ rev (1m)-5.2%
EPS NQ rev (3m)-5.2%
EPS NY rev (1m)-6.61%
EPS NY rev (3m)-11.83%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)0.25%
Revenue NY rev (3m)-1.53%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.85 | ||
| Fwd PE | 8.99 | ||
| P/S | 0.26 | ||
| P/FCF | 7.86 | ||
| P/OCF | 4.2 | ||
| P/B | 2.55 | ||
| P/tB | N/A | ||
| EV/EBITDA | 4.8 |
EPS(TTM)2.62
EY12.74%
EPS(NY)2.29
Fwd EY11.12%
FCF(TTM)2.62
FCFY12.73%
OCF(TTM)4.9
OCFY23.81%
SpS77.94
BVpS8.08
TBVpS-1.14
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.65% | ||
| ROE | 25.89% | ||
| ROCE | 8.54% | ||
| ROIC | 6.64% | ||
| ROICexc | 6.93% | ||
| ROICexgc | 9.01% | ||
| OM | 4.56% | ||
| PM (TTM) | 2.68% | ||
| GM | 35.95% | ||
| FCFM | 3.36% |
ROA(3y)4.47%
ROA(5y)5.31%
ROE(3y)47.59%
ROE(5y)77.21%
ROIC(3y)9.17%
ROIC(5y)N/A
ROICexc(3y)10.27%
ROICexc(5y)N/A
ROICexgc(3y)14.27%
ROICexgc(5y)N/A
ROCE(3y)11.81%
ROCE(5y)N/A
ROICexcg growth 3Y-33.67%
ROICexcg growth 5YN/A
ROICexc growth 3Y-37.36%
ROICexc growth 5YN/A
OM growth 3Y-28.61%
OM growth 5YN/A
PM growth 3Y-34.72%
PM growth 5YN/A
GM growth 3Y-3.67%
GM growth 5Y5.76%
F-Score6
Asset Turnover1.36
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.67 | ||
| Debt/FCF | 5.18 | ||
| Debt/EBITDA | 2 | ||
| Cap/Depr | 71.37% | ||
| Cap/Sales | 2.92% | ||
| Interest Coverage | 3.89 | ||
| Cash Conversion | 72.54% | ||
| Profit Quality | 125.15% | ||
| Current Ratio | 1.16 | ||
| Quick Ratio | 0.33 | ||
| Altman-Z | 1.97 |
F-Score6
WACC9.54%
ROIC/WACC0.7
Cap/Depr(3y)73%
Cap/Depr(5y)62.74%
Cap/Sales(3y)3.19%
Cap/Sales(5y)2.88%
Profit Quality(3y)116.72%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)16.96%
EPS 3Y-25.48%
EPS 5YN/A
EPS Q2Q%50.68%
EPS Next Y-20.84%
EPS Next 2Y-6.56%
EPS Next 3Y0.39%
EPS Next 5YN/A
Revenue 1Y (TTM)1.45%
Revenue growth 3Y-2.8%
Revenue growth 5Y-3.67%
Sales Q2Q%-0.47%
Revenue Next Year0.58%
Revenue Next 2Y1.18%
Revenue Next 3Y1.11%
Revenue Next 5YN/A
EBIT growth 1Y-5.02%
EBIT growth 3Y-30.61%
EBIT growth 5YN/A
EBIT Next Year64.47%
EBIT Next 3Y17.7%
EBIT Next 5YN/A
FCF growth 1Y-24.55%
FCF growth 3Y-28.72%
FCF growth 5Y22.37%
OCF growth 1Y-17.68%
OCF growth 3Y-20.66%
OCF growth 5Y6.17%