Saul et al.,
SKX is having a fantastic run since reporting Q1/15; the stock price has jumped more than 60% in just 3 months. On the last conference call, management said they were comfortable with analysts’ estimates. The averages for Q2 estimates are $727M revenue and 1.00 EPS. Both of these numbers are lower than Q1/15 ($768 & 1.10). The general trend is for Q2 growth to be less than Q1, but not to have lower revenue and EPS as suggested above. I believe SKX will easily beat those numbers.
With the price around $125, and using the estimates, $727 & 1.00, the P/E is now closer to 35, that is, over 50% higher than the average for the last 4 quarters (~22). The 1YPEG will be closer to 0.8. Using the upper range estimate does not move the needle much lower either.
I have a 4% stake in both SKX and UA. UA reported good numbers and I would like to add to my SKX. Do you think this is still a buy at $125 given the recent run or should I wait until after earnings? What are your thoughts about SKX now?
LegoAbs
P.S. I bought my first Skechers shoe two weeks ago and have to admit they are very comfortable. I got one for my son and he likes his too - looks like this is a gem in the making.
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LegoAbs,
With the price around $125, and using the estimates, $727 & 1.00, the P/E is now closer to 35, that is, over 50% higher than the average for the last 4 quarters (~22). The 1YPEG will be closer to 0.8. Using the upper range estimate does not move the needle much lower either.
I have a 4% stake in both SKX and UA. UA reported good numbers and I would like to add to my SKX. Do you think this is still a buy at $125 given the recent run or should I wait until after earnings? What are your thoughts about SKX now?
I’ve modeled $0.95 in adjusted EPS for the 6/15 quarter, but I expect that they will likely beat that so perhaps your $1.00 is a good estimate.
At $125 and $1 per share, we will have a P/E of 35.4 and a 1YRPEG of 0.52. Certainly that’s not as cheap as it was 3 months ago when I argued that it was still a great buy at $85:
http://discussion.fool.com/skx-up-still-a-buy-what-now-31725031…
I don’t think it’s expensive now, and I still believe that the international expansion should continue to drive growth for another couple of years.
I’m not adding shares but I’m also not selling any. I currently have a 13.1% position and if I include the in-the-money value of my Jan17 $65 calls and $90 calls, I have a total position size of 16.4%, which is my second largest position behind SWKS.
Chris
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