Very high trading multiple makes it hard to justify investment. If the revenues do not grow in line with current valuation - will be rude awakening for investors (share price will fall sharply). If share price was to fall to ~20x earnings, would be a good time to buy. Business is very strong - just a matter of valuation.
F has seen negative momentum over the past few years, falling from a high of $25 in early 2022 to $9 today. It pays a good yield of 8.4%, but this is mostly high due to its falling stock price. Sales are expected to be mostly flat over the next few years, and earnings are expected to fall in the near term, with some growth thereafter. The auto industry was at one time a rising and popular theme, but we have since likely reached peak auto, and the forward growth is not as attractive as it once was. It is cheap (6X forward earnings), but so far it has proven to be a value trap. We would look for opportunities elsewhere in the industrials segment.
Unlock Premium - Try 5i Free
EPS of 63c beat estimates of 53c. Revenue of $1.42B beat estimates of $1.38B. EBITDA of $881M beat estimates by 13%. Profit fell 27% despite higher production, due to lower prices. Production rose 4.7% year-over-year. Production matched estimates. EPS does call for lower income in 2025 but we think this is well-reflected in its low valuation. Overall, we are comfortable.
Unlock Premium - Try 5i Free
EPS of 74c missed estimates of 77c. Revenue of $355M beat estimates of $331M. EBITDA of $68M missed estimates by 7%. E.L.F. Beauty's slightly reduced sales outlook for fiscal 2025 reflects softer-than-expected January demand, demonstrating that the cosmetics and skin-care maker isn't immune to broader trends. The midpoint of guidance is still 5% above initial projections, as sales proved better than anticipated through 3Q, despite tough comparisons. The revised projection of $1.30-$1.31 billion in annual sales suggests a deceleration in growth to 27-28% for 2025, a three-year low. Slowing could extend into 2026 as consumers remain selective and beauty demand has yet to rebound, though store and shelf-expansion may provide an offset. Ebitda margin appears poised to be flat to slightly lower vs. fiscal 2024. Increased tariffs on imports from China could add pressure in 2026. The key word here is 'deceleration'. That, combined 26X earnings valuation and with negative stock momentum, compels us to sit this one out for a while.
Unlock Premium - Try 5i Free
Good company, but institutional coverage not picking it up. Very good business with strong dividend. Thinly traded shares, but good for retail investors. Revenues continue to rise with excellent profits.