Macroaxis Stories

Is Vince Holding (USA Stocks:VNCE) ready for a correction?

December 22, 2024  By Vlad Skutelnik
Macroaxis Story
Vince Holding Corp, with a market capitalization of 22.7M, presents an interesting valuation case as we look towards January 2025. Despite a high probability of bankruptcy at 88.00%, the company boasts a positive net income of 25.4M, suggesting potential resilience and room for growth if strategic measures are implemented effectively.

Main Ideas

Vince Holding Corp is currently managing liabilities totaling $128.46 million, with a Debt to Equity (D/E) ratio of 6.22. This suggests the company might struggle to generate enough cash to meet its financial obligations. It has a performance score of 12 out of 100, indicating challenges in its operational efficiency. The stock has a beta of -2.53, suggesting a high risk compared to the market. This means that when the market goes up, Vince Holding's stock might decrease significantly. However, during market downturns, the stock could potentially outperform. To assess future returns, consider using Vince Holding Corp's expected shortfall, day median price, and the interplay between potential upside and accumulation distribution.
Published a day ago
View all stories for Vince Holding | View All Stories

Reviewed by Rifka Kats

Fashion is fickle, and so too can be the fortunes of companies like Vince Holding Corp. As we look toward January 2025, Vince Holding's stock valuation presents a mixed bag. With a market capitalization of just $22.7 million and a high probability of bankruptcy at 88%, the company faces significant financial challenges. Despite a modest operating margin of 1.52% and a return on equity of 2.47%, the apparel manufacturer struggles with a hefty debt-to-equity ratio of 6.22%. The stock's price-to-book ratio of 1.06X suggests it is trading close to its book value, indicating limited investor confidence in its growth prospects. However, the forward PE of 12.36 hints at some optimism for future earnings. Investors should weigh these factors carefully, considering the volatile nature of the apparel industry and the company's precarious financial position. Many millennials are steering clear of the textiles, apparel, and luxury goods sectors, but it's worth taking a closer look at Vince Holding Corp to grasp its current market dynamics. Why do we remain optimistic about its potential recovery? Is the company's current valuation reasonable? We'll delve into Vince Holding Corp's valuation to provide a clearer perspective on whether investing in this stock is a wise decision.
We determine the current worth of Vince Holding Corp using both absolute as well as relative valuation methodologies to arrive at its intrinsic value. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of Vince Holding Corp based exclusively on its fundamental and basic technical indicators. By analyzing Vince Holding's financials, quarterly and monthly indicators, and related drivers such as dividends, operating cash flow, and various types of growth rates, we attempt to find the most accurate representation of Vince Holding's intrinsic value. In some cases, mostly for established, large-cap companies, we also incorporate more traditional valuation methods such as dividend discount, discounted cash flow, or asset-based models. As compared to an absolute model, our relative valuation model uses a comparative analysis of Vince Holding. We calculate exposure to Vince Holding's market risk, different technical and fundamental indicators, relevant financial multiples and ratios, and then comparing them to Vince Holding's related companies.

Vince Holding Corp Investment Alerts

Vince investment alerts and warnings help investors to get more proficient at understanding not only critical technical and fundamental signals but also the significant portfolio-centered indicators. These indicators include beta, alpha, and other risk-related measures that will help you in monitoring Vince Holding Corp performance across your portfolios.Please check all investment alerts for Vince

Vince Holding Valuation Ratios as Compared to Competition

Our valuation model uses many indicators to compare Vince value to that of its competitors to determine the firm's financial worth. You can analyze the relationship between different fundamental ratios across Vince Holding competition to find correlations between indicators driving the intrinsic value of Vince.

Vince Holding Gross Profit

Vince Holding Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Vince Holding previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Vince Holding Gross Profit growth over the last 10 years. Please check Vince Holding's gross profit and other fundamental indicators for more details.

Is Vince Holding valued correctly by the market?

The company reported the previous year's revenue of 292.89 M. Net Income was 25.45 M with profit before overhead, payroll, taxes, and interest of 137.97 M.

Margins Breakdown

Vince profit margins show the degree to which it makes money. Margin indicators are used not only by investors but also by creditors or Vince Holding itself as indicators of financial health and management effectiveness. Please look more closely at the different varieties of Vince Holding profit margins.
0.21
Operating Profit Margin
0.1
Net Profit Margin
0.18
Pretax Profit Margin
Pretax Profit Margin0.18
Operating Profit Margin0.21
Net Profit Margin0.1
Gross Profit Margin0.49
Vince Holding Change In Cash is rather stable at the moment. Further, Vince Holding Free Cash Flow is increasing over the last 8 years.
The latest value of Vince Holding Free Cash Flow is 189,000. Growth is never by mere chance; it is the result of forces working together, said James Cash Penney. As we look towards January 2025, Vince Holding Corp shows potential for growth, despite its challenges. With a market capitalization of $22.69 million and a book value of $4.16, the company is currently valued attractively relative to its assets. However, the company's high beta of 1.76 indicates that its stock is more volatile than the market, suggesting that investors should be prepared for fluctuations. Furthermore, Vince Holding's significant debt of $128.46 million and a probability of bankruptcy at 88% highlight the financial risks involved. Nevertheless, its positive operating income of $31.6 million suggests that the company is generating profit from its core business activities, which could be a promising sign for future growth if managed effectively..

Vince Holding implied volatility may change after the surge

Vince Holding Corp's stock has recently seen a significant change, with its skewness dropping to 4.62. This suggests that the distribution of returns is becoming more balanced, which might indicate a shift in market sentiment. Such a change could affect implied volatility, impacting option pricing and trading strategies. This adjustment may reflect the market's response to recent news or performance data. Investors should monitor how this might influence future price movements and volatility patterns.
Vince Holding Corp is currently experiencing above-average volatility. Understanding these trends can help investors make informed decisions. High volatility, especially in bear markets, can significantly impact Vince Holding's stock price, often prompting investors to adjust their portfolios by acquiring different assets as prices decline.Considering the current dynamics surrounding Vince Holding Corp, potential investors should weigh the company's valuation and market sentiment carefully. With an analyst target price estimated at $8 and a possible upside price of 18.54, there appears to be significant room for growth if the company can capitalize on its strategic initiatives. However, the naive expected forecast value of 5.34 suggests a more cautious approach might be warranted. The analyst consensus of a "Strong Buy" indicates confidence in the company's future prospects, but as always, it's crucial to consider your own risk tolerance and investment goals before making a decision..

Building efficient market-beating portfolios requires time, education, and a lot of computing power!

The Portfolio Architect is an AI-driven system that provides multiple benefits to our users by leveraging cutting-edge machine learning algorithms, statistical analysis, and predictive modeling to automate the process of asset selection and portfolio construction, saving time and reducing human error for individual and institutional investors.

Try AI Portfolio Architect

Editorial Staff

Vlad Skutelnik is a Macroaxis Contributor. Vlad covers stocks, funds, cryptocurrencies, and ETFs that are traded in North America, focusing primarily on fundamentals, valuation and market volatility. He has many years of experience in fintech, predictive investment analytics, and risk management. View Profile
This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Vlad Skutelnik do not own shares of Vince Holding Corp. Please refer to our Terms of Use for any information regarding our disclosure principles.

Would you like to provide feedback on the content of this article?

You can get in touch with us directly or send us a quick note via email to editors@macroaxis.com