Should Your Next Investment Retail Be In Boot Barn Holdings Inc (NYSE:BOOT)?
Boot Barn Holdings Inc (NYSE:BOOT), a US$646.13m small-cap, operates in the retail industry which has experienced a structural shift in terms of digitalization. Physical store retailers faced the inevitable challenge of building up an online presence in order to enhance their omnichannel capabilities. Retail analysts are forecasting for the entire industry, a strong double-digit growth of 14.36% in the upcoming year , and an enormous growth of 43.71% over the next couple of years. This rate is larger than the growth rate of the US stock market as a whole. Below, I will examine the sector growth prospects, and also determine whether Boot Barn Holdings is a laggard or leader relative to its retail peers. Check out our latest analysis for Boot Barn Holdings
What’s the catalyst for Boot Barn Holdings’s sector growth?
NYSE:BOOT Past Future Earnings August 7th 18 E-retailing is expected to remain the fastest growing sales channel, shifting the retail landscape. Significant number of retail store closures and bankruptcies were an indication of both changing consumer preferences and rising online competition. Over the past year, the industry saw growth of 7.57%, though still underperforming the wider US stock market. Boot Barn Holdings leads the pack with its impressive earnings growth of over 100% last year. However, analysts are not expecting this industry-beating trend to continue, with future growth expected to be 4.23% compared to the wider retail sector growth hovering in the teens next year. As a future industry laggard in growth, Boot Barn Holdings may be a cheaper stock relative to its peers.
Is Boot Barn Holdings and the sector relatively cheap?
NYSE:BOOT PE PEG Gauge August 7th 18 The retail industry is trading at a PE ratio of 19.8x, relatively similar to the rest of the US stock market PE of 18.39x. This means the industry, on average, is fairly valued compared to the wider market – minimal expected gains and losses from mispricing here. Furthermore, the industry returned a similar 12.88% on equities compared to the market’s 11.38%. On the stock-level, Boot Barn Holdings is trading at a PE ratio of 21.83x, which is relatively in-line with the average retail stock. In terms of returns, Boot Barn Holdings generated 13.46% in the past year, in-line with its industry average.
Next Steps:
If Boot Barn Holdings has been on your watchlist for a while, now may not be the best time to enter into the stock. The company is a retail industry laggard in terms of its future growth outlook, and is trading relatively in-line with its peers. If growth and mispricing are important aspects for your investment thesis, there may be better investments in the retail sector. However, before you make a decision on the stock, I suggest you look at Boot Barn Holdings’s fundamentals in order to build a holistic investment thesis.
Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
Historical Track Record: What has BOOT’s performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Boot Barn Holdings? Explore our interactive list of stocks with large growth 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.