JOANN (NasdaqGM:JOAN) - Share price, News & Analysis

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

JOAN ($8.15) is trading below our estimate of [[fair value]] ($61.93)

JOAN fundamental analysis
Snowflake Score
Valuation	3/6
Future Growth	3/6
Past Performance	1/6
Financial Health	1/6
Dividends	2/6

JOAN Stock Overview

JOANN Inc. operates as a specialty retailer of sewing and fabrics, and arts and crafts category products in the United States.

Rewards

Trading at 86.8% below our estimate of its fair value

Earnings are forecast to grow 58.45% per year

Risk Analysis

Interest payments are not well covered by earnings

Dividend of 5.4% is not well covered by earnings or forecast to be in the next 3 years

Volatile share price over the past 3 months

Large one-off items impacting financial results

+ 2 more risks

JOANN Competitors

Container Store Group

NYSE:TCS

US$364.0m

Big 5 Sporting Goods

NasdaqGS:BGFV

US$249.1m

Sportsman's Warehouse Holdings

NasdaqGS:SPWH

US$441.6m

Build-A-Bear Workshop

NYSE:BBW

US$274.5m

Price History & Performance

Summary of all time highs, changes and price drops for JOANN
Historical stock prices
Current Share Price	US$8.15
52 Week High	US$16.65
52 Week Low	US$6.23
Beta	0
1 Month Change	-1.93%
3 Month Change	-30.87%
1 Year Change	-47.79%
3 Year Change	n/a
5 Year Change	n/a
Change since IPO	-33.47%

Recent News & Updates

Jun 27

JOANN: Poor Fundamentals Keep Us Bearish

Joann reported its Q1 results with a widening loss and weak sales. While the company expects supply chain challenges to improve going forward, we don't see much room for a turnaround. We expect poor fundamentals including a large debt to keep risks tilted to the downside.

Shareholder Returns

	JOAN	US Specialty Retail	US Market
7D	0.5%	0.04%	1.7%
1Y	-47.8%	-29.8%	-20.4%

Return vs Industry: JOAN underperformed the US Specialty Retail industry which returned -27.1% over the past year.

Return vs Market: JOAN underperformed the US Market which returned -18.8% over the past year.

Price Volatility

Is JOAN's price volatile compared to industry and market?
JOAN volatility
JOAN Average Weekly Movement	12.3%
Specialty Retail Industry Average Movement	8.8%
Market Average Movement	8.0%
10% most volatile stocks in US Market	16.8%
10% least volatile stocks in US Market	3.2%

Stable Share Price: JOAN is more volatile than 75% of US stocks over the past 3 months, typically moving +/- 12% a week.

Volatility Over Time: JOAN's weekly volatility (12%) has been stable over the past year, but is still higher than 75% of US stocks.

About the Company

Founded	Employees	CEO	Website
1943	13,530	Wade Miquelon	https://www.joann.com

JOANN Inc. operates as a specialty retailer of sewing and fabrics, and arts and crafts category products in the United States. Its products in sewing category include cotton fabrics; warm fabrics, such as fleece and flannel fabrics; home decorating and utility fabrics and accessories; fashion and sportswear fabrics; special occasion fabrics; seasonally themed and licensed fabric designs; and sewing construction supplies comprising cutting implements, threads, zippers, trims, tapes, pins, elastic, and buttons, as well as patterns for sewing projects. The company’s products in arts and crafts, home décor, and other category consist of yarn and yarn accessories, and needlecraft kits and supplies; paper crafting components; craft materials; fine art materials; sewing machines, craft technology, lighting, irons, organizers, and other products; artificial floral products; seasonal décor and entertaining products; home décor accessories; ready-made frames; comprehensive assortment books and magazines; and non-merchandise services.

JOANN Fundamentals Summary

How do JOANN's earnings and revenue compare to its market cap?
JOAN fundamental statistics
Market Cap	US$331.44m
Earnings (TTM)	US$6.50m
Revenue (TTM)	US$2.34b

51.0x

P/E Ratio

0.1x

P/S Ratio

Is JOAN overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
JOAN income statement (TTM)
Revenue	US$2.34b
Cost of Revenue	US$1.19b
Gross Profit	US$1.15b
Other Expenses	US$1.14b
Earnings	US$6.50m

Last Reported Earnings

Apr 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	0.16
Gross Margin	49.15%
Net Profit Margin	0.28%
Debt/Equity Ratio	815.5%

How did JOAN perform over the long term?

See historical performance and comparison

Dividends

5.4%

Current Dividend Yield

261%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

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

Valuation Score

3/6

Valuation Score 3/6

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

Key Valuation Metric

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

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for JOAN. This is calculated by dividing JOAN's market cap by their current preferred multiple.
What is JOAN's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$331.44m

JOAN 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	0.9x
Enterprise Value/EBITDA	20.9x
PEG Ratio	0.9x

Price to Earnings Ratio vs Peers

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

JOAN PE Ratio vs Peers

The above table shows the PE ratio for JOAN vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	4.2x
TCS Container Store Group	4.5x	7.0%	US$364.0m
BGFV Big 5 Sporting Goods	2.8x	n/a	US$249.1m
SPWH Sportsman's Warehouse Holdings	4.4x	-14.8%	US$441.6m
BBW Build-A-Bear Workshop	5.3x	n/a	US$274.5m
JOAN JOANN	51x	58.4%	US$331.4m

Forward PE

Price-To-Earnings vs Peers: JOAN is expensive based on its Price-To-Earnings Ratio (51x) compared to the peer average (4.2x).

Price to Earnings Ratio vs Industry

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

Price-To-Earnings vs Industry: JOAN is expensive based on its Price-To-Earnings Ratio (51x) compared to the US Specialty Retail industry average (6.3x)

Price to Earnings Ratio vs Fair Ratio

What is JOAN'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.

JOAN PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	51x
Fair PE Ratio	26.2x

Price-To-Earnings vs Fair Ratio: JOAN is expensive based on its Price-To-Earnings Ratio (51x) compared to the estimated Fair Price-To-Earnings Ratio (26.2x).

Share Price vs Fair Value

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

Below Fair Value: JOAN ($8.15) is trading below our estimate of fair value ($61.93)

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

Price to Earnings Growth Ratio

PEG Ratio: JOAN is good value based on its PEG Ratio (0.9x)

Discover undervalued companies

Future Growth

How is JOANN forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

Future Growth Score

3/6

Future Growth Score 3/6

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

58.4%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: JOAN's forecast earnings growth (58.4% per year) is above the savings rate (1.9%).

Earnings vs Market: JOAN's earnings (58.4% per year) are forecast to grow faster than the US market (13.8% per year).

High Growth Earnings: JOAN's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: JOAN's revenue (2.1% per year) is forecast to grow slower than the US market (8.3% per year).

High Growth Revenue: JOAN's revenue (2.1% 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 JOAN's Return on Equity is forecast to be high in 3 years time

Discover growth companies

Past Performance

How has JOANN performed over the past 5 years?

Past Performance Score

1/6

Past Performance Score 1/6

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

19.0%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: JOAN has a large one-off gain of $22.9M impacting its April 30 2022 financial results.

Growing Profit Margin: JOAN's current net profit margins (0.3%) are lower than last year (8.8%).

Past Earnings Growth Analysis

Earnings Trend: JOAN's earnings have grown by 19% per year over the past 5 years.

Accelerating Growth: JOAN's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: JOAN had negative earnings growth (-97.4%) over the past year, making it difficult to compare to the Specialty Retail industry average (40.3%).

Return on Equity

High ROE: JOAN's Return on Equity (5.7%) is considered low.

Discover strong past performing companies

Financial Health

How is JOANN's financial position?

Financial Health Score

1/6

Financial Health Score 1/6

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

Financial Position Analysis

Short Term Liabilities: JOAN's short term assets ($755.0M) exceed its short term liabilities ($497.7M).

Long Term Liabilities: JOAN's short term assets ($755.0M) do not cover its long term liabilities ($1.8B).

Debt to Equity History and Analysis

Debt Level: JOAN's net debt to equity ratio (796.1%) is considered high.

Reducing Debt: Insufficient data to determine if JOAN's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: JOAN's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: JOAN's interest payments on its debt are not well covered by EBIT (0.6x coverage).

Balance Sheet

Discover healthy companies

Dividend

What is JOANN current dividend yield, its reliability and sustainability?

Dividend Score

2/6

Dividend Score 2/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

5.40%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: JOAN's dividend (5.4%) is higher than the bottom 25% of dividend payers in the US market (1.57%).

High Dividend: JOAN's dividend (5.4%) is in the top 25% of dividend payers in the US market (4.25%)

Stability and Growth of Payments

Stable Dividend: Too early to tell whether JOAN's dividend payments have been stable as they only just started paying a dividend.

Growing Dividend: Too early to tell if JOAN's dividend payments are increasing as they only just started paying a dividend.

Earnings Payout to Shareholders

Earnings Coverage: With its high payout ratio (260.9%), JOAN's dividend payments are not well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: JOAN is paying a dividend but the company has no free cash flows.

Discover strong dividend paying companies

Management

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

3.2yrs

Average management tenure

CEO

Wade Miquelon (56 yo)

3.67yrs

Tenure

US$2,431,858

Compensation

Mr. Wade D. Miquelon has been the Chief Executive Officer and President of Joann Inc. since October 2018 and has been its Director since February 2019. Prior to that, Mr. Miquelon served as an Executive Vi...

CEO Compensation Analysis

Compensation vs Market: Wade's total compensation ($USD2.43M) is about average for companies of similar size in the US market ($USD2.75M).

Compensation vs Earnings: Insufficient data to compare Wade's compensation with company performance.

Leadership Team

Experienced Management: JOAN's management team is considered experienced (3.2 years average tenure).

Board Members

Experienced Board: JOAN'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: JOAN insiders have only sold shares 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	2022/06/28 00:00
End of Day Share Price	2022/06/28 00:00
Earnings	2022/04/30
Annual Earnings	2022/01/29