Shoe Zone (AIM:SHOE) - Share price, News & Analysis

Q: What is the Fair Price of SHOE when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

SHOE (£1.9) is trading below our estimate of [[fair value]] (£29.98)

SHOE fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	1/6
Past Performance	3/6
Financial Health	6/6
Dividends	3/6

SHOE Stock Overview

Shoe Zone plc operates as a footwear retailer in the United Kingdom and the Republic of Ireland.

Rewards

Trading at 93.7% below our estimate of its fair value

Revenue is forecast to grow 5.71% per year

Became profitable this year

Risk Analysis

Earnings are forecast to decline by an average of 48% per year for the next 3 years

Unstable dividend track record

Shoe Zone Competitors

QUIZ

AIM:QUIZ

UK£17.3m

Topps Tiles

LSE:TPT

UK£89.1m

Card Factory

LSE:CARD

UK£170.0m

ScS Group

LSE:SCS

UK£54.4m

Price History & Performance

Summary of all time highs, changes and price drops for Shoe Zone
Historical stock prices
Current Share Price	UK£1.90
52 Week High	UK£2.05
52 Week Low	UK£0.62
Beta	1.38
1 Month Change	16.92%
3 Month Change	28.81%
1 Year Change	173.38%
3 Year Change	-1.04%
5 Year Change	19.12%
Change since IPO	12.43%

Recent News & Updates

Jul 27

Shoe Zone (LON:SHOE) Could Become A Multi-Bagger

If you're not sure where to start when looking for the next multi-bagger, there are a few key trends you should keep an...

Shareholder Returns

	SHOE	GB Specialty Retail	GB Market
7D	-1.8%	3.3%	0.9%
1Y	173.4%	-19.3%	-8.2%

Return vs Industry: SHOE exceeded the UK Specialty Retail industry which returned -20.6% over the past year.

Return vs Market: SHOE exceeded the UK Market which returned -8.3% over the past year.

Price Volatility

Is SHOE's price volatile compared to industry and market?
SHOE volatility
SHOE Average Weekly Movement	7.7%
Specialty Retail Industry Average Movement	6.3%
Market Average Movement	5.4%
10% most volatile stocks in GB Market	10.8%
10% least volatile stocks in GB Market	2.7%

Stable Share Price: SHOE is not significantly more volatile than the rest of UK stocks over the past 3 months, typically moving +/- 8% a week.

Volatility Over Time: SHOE's weekly volatility (8%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2014	2,854	Anthony Edward Smith	https://www.shoezone.com

Shoe Zone plc operates as a footwear retailer in the United Kingdom and the Republic of Ireland. The company offers shoes for men, women, boys, and girls. It operates 410 stores and shoezone.com, a Website.

Shoe Zone Fundamentals Summary

How do Shoe Zone's earnings and revenue compare to its market cap?
SHOE fundamental statistics
Market Cap	UK£94.54m
Earnings (TTM)	UK£11.99m
Revenue (TTM)	UK£148.57m

7.9x

P/E Ratio

0.6x

P/S Ratio

Is SHOE overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
SHOE income statement (TTM)
Revenue	UK£148.57m
Cost of Revenue	UK£108.98m
Gross Profit	UK£39.59m
Other Expenses	UK£27.60m
Earnings	UK£11.99m

Last Reported Earnings

Apr 02, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	0.24
Gross Margin	26.65%
Net Profit Margin	8.07%
Debt/Equity Ratio	0%

How did SHOE perform over the long term?

See historical performance and comparison

Dividends

2.6%

Current Dividend Yield

10%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is SHOE undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for SHOE?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for SHOE. This is calculated by dividing SHOE's market cap by their current preferred multiple.
What is SHOE's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	UK£94.54m

SHOE key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	0.8x
Enterprise Value/EBITDA	5.4x
PEG Ratio	-0.2x

Price to Earnings Ratio vs Peers

How does SHOE's PE Ratio compare to its peers?

SHOE PE Ratio vs Peers

The above table shows the PE ratio for SHOE vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	16.2x
QUIZ QUIZ	8.4x	n/a	UK£17.3m
TPT Topps Tiles	7.4x	n/a	UK£89.1m
CARD Card Factory	21x	38.6%	UK£170.0m
SCS ScS Group	27.9x	7.4%	UK£54.4m
SHOE Shoe Zone	7.9x	-48.0%	UK£94.5m

Price-To-Earnings vs Peers: SHOE is good value based on its Price-To-Earnings Ratio (7.9x) compared to the peer average (16.2x).

Price to Earnings Ratio vs Industry

How does SHOE's PE Ratio compare vs other companies in the GB Specialty Retail Industry?

Price-To-Earnings vs Industry: SHOE is good value based on its Price-To-Earnings Ratio (7.9x) compared to the UK Specialty Retail industry average (8.7x)

Price to Earnings Ratio vs Fair Ratio

What is SHOE's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

SHOE PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	7.9x
Fair PE Ratio	4.2x

Price-To-Earnings vs Fair Ratio: SHOE is expensive based on its Price-To-Earnings Ratio (7.9x) compared to the estimated Fair Price-To-Earnings Ratio (4.2x).

Share Price vs Fair Value

What is the Fair Price of SHOE when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: SHOE (£1.9) is trading below our estimate of fair value (£29.98)

Significantly Below Fair Value: SHOE is trading below fair value by more than 20%.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Insufficient data to show price forecast.

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Future Growth

How is Shoe Zone forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

Future Growth Score

1/6

Future Growth Score 1/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

-48.0%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: SHOE's earnings are forecast to decline over the next 3 years (-48% per year).

Earnings vs Market: SHOE's earnings are forecast to decline over the next 3 years (-48% per year).

High Growth Earnings: SHOE's earnings are forecast to decline over the next 3 years.

Revenue vs Market: SHOE's revenue (5.7% per year) is forecast to grow faster than the UK market (4.5% per year).

High Growth Revenue: SHOE's revenue (5.7% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: Insufficient data to determine if SHOE's Return on Equity is forecast to be high in 3 years time

Discover growth companies

Past Performance

How has Shoe Zone performed over the past 5 years?

Past Performance Score

3/6

Past Performance Score 3/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-25.1%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: SHOE has high quality earnings.

Growing Profit Margin: SHOE became profitable in the past.

Past Earnings Growth Analysis

Earnings Trend: SHOE's earnings have declined by 25.1% per year over the past 5 years.

Accelerating Growth: SHOE has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: SHOE has become profitable in the last year, making it difficult to compare its past year earnings growth to the Specialty Retail industry (46.2%).

Return on Equity

High ROE: SHOE's Return on Equity (40.8%) is considered outstanding.

Discover strong past performing companies

Financial Health

How is Shoe Zone's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: SHOE's short term assets (£48.9M) exceed its short term liabilities (£35.5M).

Long Term Liabilities: SHOE's short term assets (£48.9M) exceed its long term liabilities (£28.5M).

Debt to Equity History and Analysis

Debt Level: SHOE is debt free.

Reducing Debt: SHOE had no debt 5 years ago.

Debt Coverage: SHOE has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: SHOE has no debt, therefore coverage of interest payments is not a concern.

Balance Sheet

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Dividend

What is Shoe Zone current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

2.63%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: SHOE's dividend (2.63%) is higher than the bottom 25% of dividend payers in the UK market (1.83%).

High Dividend: SHOE's dividend (2.63%) is low compared to the top 25% of dividend payers in the UK market (5.13%).

Stability and Growth of Payments

Stable Dividend: SHOE has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: SHOE's dividend payments have increased, but the company has only paid a dividend for 8 years.

Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (10.4%), SHOE's dividend payments are thoroughly covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its low cash payout ratio (6.8%), SHOE's dividend payments are thoroughly covered by cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

3.0yrs

Average management tenure

CEO

Anthony Edward Smith (55 yo)

3yrs

Tenure

UK£560,957

Compensation

Mr. Anthony Edward Pennington Smith served as Chief Executive of Shoe Zone plc since August 30, 2019. Mr. Smith was the Executive Chairman of the Board of Shoe Zone Plc from June 21, 2016 until August 30,...

CEO Compensation Analysis

Compensation vs Market: Anthony Edward's total compensation ($USD678.75K) is above average for companies of similar size in the UK market ($USD336.18K).

Compensation vs Earnings: Anthony Edward's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: SHOE's management team is considered experienced (3 years average tenure).

Board Members

Experienced Board: SHOE's board of directors are considered experienced (4.1 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: SHOE insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/08/16 00:00
End of Day Share Price	2022/08/16 00:00
Earnings	2022/04/02
Annual Earnings	2021/10/02