Citi Trends Inc (NASDAQ:CTRN): Commentary On Fundamentals
Citi Trends Inc (NASDAQ:CTRN) is a company with exceptional fundamental characteristics. Upon building up an investment case for a stock, we should look at various aspects. In the case of CTRN, it is a company with great financial health as well as a a strong track record of performance. In the following section, I expand a bit more on these key aspects. If you’re interested in understanding beyond my high-level commentary, take a look at the report on Citi Trends here.
Flawless balance sheet with proven track record
Over the past year, CTRN has grown its earnings by 51.4%, with its most recent figure exceeding its annual average over the past five years. Not only did CTRN outperformed its past performance, its growth also surpassed the Specialty Retail industry expansion, which generated a 10.4% earnings growth. This paints a buoyant picture for the company. CTRN’s strong financial health means that all of its upcoming liability payments are able to be met by its current cash and short-term investment holdings. This suggests prudent control over cash and cost by management, which is a key determinant of the company’s health. CTRN currently has no debt on its balance sheet. This means it is running its business only on equity capital funding, which is typically normal for a small-cap company. Investors’ risk associated with debt is virtually non-existent and the company has plenty of headroom to grow debt in the future, should the need arise.
Next Steps:
For Citi Trends, there are three key factors you should further examine:
Future Outlook: What are well-informed industry analysts predicting for CTRN’s future growth? Take a look at our free research report of analyst consensus for CTRN’s outlook.
Valuation: What is CTRN worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether CTRN is currently mispriced by the market.
Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of CTRN? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
