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 122 industry peers in the Specialty Retail industry. There are concerns on the financial health of VSCO while its profitability can be described as average. VSCO scores decently on growth, while it is valued quite cheap. This could make an interesting combination.
1. Profitability
1.1 Basic Checks
VSCO had positive earnings in the past year.
In the past year VSCO had a positive cash flow from operations.
VSCO had positive earnings in 4 of the past 5 years.
Each year in the past 5 years VSCO had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 3.65%, VSCO is in the better half of the industry, outperforming 63.11% of the companies in the same industry.
VSCO has a better Return On Equity (25.89%) than 82.79% 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 64.75% 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 12.03%.
| 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
Looking at the Profit Margin, with a value of 2.68%, VSCO is in the better half of the industry, outperforming 65.57% of the companies in the same industry.
In the last couple of years the Profit Margin of VSCO has declined.
VSCO has a Operating Margin of 4.56%. This is in the better half of the industry: VSCO outperforms 66.39% of its industry peers.
VSCO's Operating Margin has declined in the last couple of years.
VSCO has a Gross Margin of 35.95%. This is comparable to the rest of the industry: VSCO outperforms 49.18% of its industry peers.
VSCO's Gross Margin has improved in the last couple of years.
| 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
VSCO has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
VSCO has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, VSCO has less shares outstanding
VSCO has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 1.95 indicates that VSCO is not a great score, but indicates only limited risk for bankruptcy at the moment.
VSCO's Altman-Z score of 1.95 is in line compared to the rest of the industry. VSCO outperforms 44.26% of its industry peers.
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 65.57% of the companies in the same industry.
A Debt/Equity ratio of 1.67 is on the high side and indicates that VSCO has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 1.67, VSCO is doing worse than 67.21% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.67 | ||
| Debt/FCF | 5.18 | ||
| Altman-Z | 1.95 |
ROIC/WACC0.7
WACC9.55%
2.3 Liquidity
A Current Ratio of 1.16 indicates that VSCO should not have too much problems paying its short term obligations.
VSCO's Current ratio of 1.16 is on the low side compared to the rest of the industry. VSCO is outperformed by 64.75% 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 has a Quick ratio of 0.33. This is in the lower half of the industry: VSCO underperforms 66.39% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.16 | ||
| Quick Ratio | 0.33 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 24.52% over the past year.
VSCO shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -25.48% yearly.
Looking at the last year, VSCO shows a small growth in Revenue. The Revenue has grown by 1.45% in the last year.
The Revenue has been decreasing by -3.67% on average over the past years.
EPS 1Y (TTM)24.52%
EPS 3Y-25.48%
EPS 5YN/A
EPS Q2Q%-25%
Revenue 1Y (TTM)1.45%
Revenue growth 3Y-2.8%
Revenue growth 5Y-3.67%
Sales Q2Q%-0.48%
3.2 Future
VSCO is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 0.56% yearly.
Based on estimates for the next years, VSCO will show a small growth in Revenue. The Revenue will grow by 1.46% on average per year.
EPS Next Y-21.36%
EPS Next 2Y-7.32%
EPS Next 3Y0.56%
EPS Next 5YN/A
Revenue Next Year0.44%
Revenue Next 2Y1.13%
Revenue Next 3Y1.46%
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 7.23 indicates a rather cheap valuation of VSCO.
Based on the Price/Earnings ratio, VSCO is valued cheaper than 92.62% of the companies in the same industry.
When comparing the Price/Earnings ratio of VSCO to the average of the S&P500 Index (26.82), we can say VSCO is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 8.32, the valuation of VSCO can be described as reasonable.
Based on the Price/Forward Earnings ratio, VSCO is valued cheaper than 86.07% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 36.21, VSCO is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.23 | ||
| Fwd PE | 8.32 |
4.2 Price Multiples
86.89% of the companies in the same industry are more expensive than VSCO, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, VSCO is valued cheaply inside the industry as 91.80% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.15 | ||
| EV/EBITDA | 4.54 |
4.3 Compensation for Growth
VSCO has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-7.32%
EPS Next 3Y0.56%
5. Dividend
5.1 Amount
No dividends for VSCO!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
18.72
-0.08 (-0.43%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners92.23%
Inst Owner Change0.3%
Ins Owners0.94%
Ins Owner Change0.38%
Market Cap1.49B
Analysts55
Price Target23.13 (23.56%)
Short Float %17.39%
Short Ratio3.54
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)2
Avg EPS beat(2)58.09%
Min EPS beat(2)10.98%
Max EPS beat(2)105.2%
EPS beat(4)4
Avg EPS beat(4)36.45%
Min EPS beat(4)7.57%
Max EPS beat(4)105.2%
EPS beat(8)6
Avg EPS beat(8)20.92%
EPS beat(12)9
Avg EPS beat(12)13.21%
EPS beat(16)13
Avg EPS beat(16)12.91%
Revenue beat(2)1
Avg Revenue beat(2)-0.52%
Min Revenue beat(2)-1.1%
Max Revenue beat(2)0.07%
Revenue beat(4)2
Avg Revenue beat(4)-0.05%
Min Revenue beat(4)-1.24%
Max Revenue beat(4)2.08%
Revenue beat(8)2
Avg Revenue beat(8)-1.17%
Revenue beat(12)2
Avg Revenue beat(12)-1.76%
Revenue beat(16)2
Avg Revenue beat(16)-2.15%
PT rev (1m)0%
PT rev (3m)-17.39%
EPS NQ rev (1m)-63.34%
EPS NQ rev (3m)-65.24%
EPS NY rev (1m)-0.65%
EPS NY rev (3m)-8.6%
Revenue NQ rev (1m)-0.9%
Revenue NQ rev (3m)-0.9%
Revenue NY rev (1m)-0.14%
Revenue NY rev (3m)0.16%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.23 | ||
| Fwd PE | 8.32 | ||
| P/S | 0.24 | ||
| P/FCF | 7.15 | ||
| P/OCF | 3.82 | ||
| P/B | 2.32 | ||
| P/tB | N/A | ||
| EV/EBITDA | 4.54 |
EPS(TTM)2.59
EY13.84%
EPS(NY)2.25
Fwd EY12.02%
FCF(TTM)2.62
FCFY13.98%
OCF(TTM)4.9
OCFY26.16%
SpS77.93
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 | 1.95 |
F-Score6
WACC9.55%
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)24.52%
EPS 3Y-25.48%
EPS 5YN/A
EPS Q2Q%-25%
EPS Next Y-21.36%
EPS Next 2Y-7.32%
EPS Next 3Y0.56%
EPS Next 5YN/A
Revenue 1Y (TTM)1.45%
Revenue growth 3Y-2.8%
Revenue growth 5Y-3.67%
Sales Q2Q%-0.48%
Revenue Next Year0.44%
Revenue Next 2Y1.13%
Revenue Next 3Y1.46%
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%