Tapestry (TPR) Valuation in Focus After Surging Sales, Dividend Hike, and Unexpected Quarterly Loss

Tapestry (TPR) just delivered its latest quarterly earnings, and the headlines are packed with intriguing signals for investors. On one hand, sales climbed sharply compared to last year, which is a clear sign there is still demand for Tapestry’s products. On the other hand, the company swung from a healthy profit to a net loss for the quarter, raising eyebrows about what’s behind this sharp reversal. At the same time, Tapestry’s management increased the dividend by 14%, reinforcing their commitment to returning value to shareholders even as the company navigates profit pressures.

This push-and-pull dynamic comes after a year of strong movement for Tapestry’s stock. Shares have more than doubled over the past twelve months, with momentum picking up in the past three months. Alongside these price gains, Tapestry completed major buyback tranches but has paused recent repurchases, which could indicate either caution or a strategic decision, depending on interpretation. The combination of continued top-line growth and shifting profitability is now a central focus in the current market narrative.

After such a dramatic swing—stronger sales, a higher dividend, but a surprise loss—the key question is whether Tapestry presents a genuine value opportunity or if the market is expecting accelerated growth ahead.

Most Popular Narrative: 13% Undervalued

According to the community narrative, Tapestry appears undervalued by 13% based on its projected earnings and margin growth over the next few years, using a discount rate of 8.86%.

Ongoing investments in digital infrastructure, omnichannel capabilities, and data-driven customer engagement are expected to support margin expansion and direct-to-consumer growth. These factors could enhance both revenue and net margins over the long term.

The key factor behind Tapestry’s bold valuation is the belief among analysts that the company is set for significant transformation. The forecast combines expectations for rapid earnings growth with strong margin expansion. Want to see which numbers support this double-digit potential and whether the optimism may be justified? The forecast includes at least one surprising assumption not typically found in traditional luxury sector analyses.

Result: Fair Value of $114.56 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent brand underperformance and heightened tariff pressures could still threaten Tapestry’s long-term growth and margin improvement prospects.

Find out about the key risks to this Tapestry narrative.

Another View: Challenging the Consensus

While analyst expectations suggest upside, the SWS DCF model offers a reality check. It also signals Tapestry is undervalued, but relies on a different set of growth and risk assumptions. Which view will ultimately win out?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Tapestry for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Tapestry Narrative

If you have a different perspective or want to dive deeper into the numbers yourself, you can develop your own narrative from scratch in just a few minutes, and do it your way.

A great starting point for your Tapestry research is our analysis highlighting 2 key rewards and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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