Consumer Discretionary
No permanent impairment to the brand - DOCS has experienced a recent revenue decline driven by several short-term operational and inventory mishaps (now fixed) along with general cyclical challenges in the footwear category. Analysts at Pernas Research believe DOCS has an enduring appeal across genders, regions, cultures and socio-economics. They also argue that the market is currently discounting several growth opportunities. Pernas (conservatively) estimates FY25 will see a return to 1bn in revenue with an after-tax FCF margin of 9%. Revenue will then grow by 4-7% over the next 4-5 years with gradual increases in FCF margin. Their TP offers 60%+ upside.
Edition: 183
- 05 April, 2024