Can Skechers’ Q3 2018 Results Stop the Slide in Its Stock?


Dec. 4 2020, Updated 10:52 a.m. ET

Skechers’ stock price movements in 2018

Skechers’ (SKX) investors have had a tough ride in 2018. Its stock began the year on a strong note and rose more than 10.0% by mid-April. However, disappointing guidance during its first-quarter results drove the stock down by a massive 32.0% in the two trading days following the results.

The company experienced a similar fate after its second-quarter earnings, which the company reported on July 19. Investors were disappointed with Skechers’ rising costs and earnings miss, and its stock fell more than 20.0%.

Skechers is sitting at year-to-date losses of 32.0%. However, its peers in the sportswear space have had a great run this year. Under Armour (UAA), Columbia Sportswear (COLM), Lululemon Athletica (LULU), and Nike (NKE) have risen 30.0%, 22.0%, 83.0%, and 20.0%, respectively.

In the last few quarters, Skechers (SKX) stock has shown high volatility after its quarterly results. It surged 7.5% on February 9 after its earnings beat for the fourth quarter of 2017. It also spiked 40.0% on October 19, 2017, in response to its earnings beat in the third quarter of 2017.

Article continues below advertisement

A look at valuations

Skechers (SKX) is currently trading 14.5x its NTM (next-12-months) earnings. Its valuations seem to be broadly in line with its three-year average PE (price-to-earnings) ratio of 14.6x. However, Skechers stock trades at a discount to most of its peers. Columbia Sportswear, Lululemon Athletica, Under Armour, and Nike trade at 25.0x, 38.0x, 75.0x, and 27.0x, respectively.

ETF investors seeking to add exposure to SKX can consider the Invesco S&P Mid-Cap 400 Pure Growth ETF (RFG), which invests ~1.3% of its portfolio in the company.


Latest Nike Inc News and Updates

    Market Realist Logo

    © Copyright 2022 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.