NasdaqGS:PLCE

Stock Analysis Report

Executive Summary

The Children's Place, Inc. operates as a children's specialty apparel retailer.

Rewards

Trading at 57.9% below its fair value

Earnings are forecast to grow 16.33% per year

Risk Analysis

Has a high level of debt

Unstable dividend track record

Highly volatile share price over past 3 months



Snowflake Analysis

Good value with moderate growth potential.


Similar Companies

Burlington Stores

NYSE:BURL

Share Price & News

How has Children's Place's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: PLCE's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-3.4%

PLCE

0.7%

US Specialty Retail

2.0%

US Market


1 Year Return

-28.8%

PLCE

21.3%

US Specialty Retail

23.5%

US Market

Return vs Industry: PLCE underperformed the US Specialty Retail industry which returned 23.7% over the past year.

Return vs Market: PLCE underperformed the US Market which returned 24.7% over the past year.


Shareholder returns

PLCEIndustryMarket
7 Day-3.4%0.7%2.0%
30 Day4.4%0.9%4.3%
90 Day-15.5%7.6%12.2%
1 Year-26.8%-28.8%23.3%21.3%26.1%23.5%
3 Year-30.2%-34.1%46.7%39.2%53.1%43.2%
5 Year12.0%3.6%49.4%36.8%75.5%56.1%

Price Volatility Vs. Market

How volatile is Children's Place's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Children's Place undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: PLCE ($66.73) is trading below our estimate of fair value ($158.67)

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


Price To Earnings Ratio

PE vs Industry: PLCE is good value based on its PE Ratio (16.8x) compared to the Specialty Retail industry average (16.9x).

PE vs Market: PLCE is good value based on its PE Ratio (17.3x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: PLCE is poor value based on its PEG Ratio (1.1x)


Price to Book Ratio

PB vs Industry: PLCE is overvalued based on its PB Ratio (4x) compared to the US Specialty Retail industry average (1.5x).


Next Steps

Future Growth

How is Children's Place forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

16.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: PLCE's forecast earnings growth (16.3% per year) is above the savings rate (1.7%).

Earnings vs Market: PLCE's earnings (16.3% per year) are forecast to grow faster than the US market (14.3% per year).

High Growth Earnings: PLCE's earnings are forecast to grow, but not significantly.

Revenue vs Market: PLCE's revenue (2.6% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: PLCE's revenue (2.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: PLCE's Return on Equity is forecast to be high in 3 years time (35.1%)


Next Steps

Past Performance

How has Children's Place performed over the past 5 years?

6.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: PLCE has high quality earnings.

Growing Profit Margin: PLCE's current net profit margins (3.2%) are lower than last year (4%).


Past Earnings Growth Analysis

Earnings Trend: PLCE's earnings have grown by 6.3% per year over the past 5 years.

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

Earnings vs Industry: PLCE had negative earnings growth (-22.7%) over the past year, making it difficult to compare to the Specialty Retail industry average (4.5%).


Return on Equity

High ROE: PLCE's Return on Equity (24%) is considered high.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Children's Place's financial position?


Financial Position Analysis

Short Term Liabilities: PLCE's short term assets ($516.1M) do not cover its short term liabilities ($660.6M).

Long Term Liabilities: PLCE's short term assets ($516.1M) exceed its long term liabilities ($370.7M).


Debt to Equity History and Analysis

Debt Level: PLCE's debt to equity ratio (72.4%) is considered high.

Reducing Debt: PLCE's debt to equity ratio has increased from 3.1% to 72.4% over the past 5 years.

Debt Coverage: PLCE's debt is well covered by operating cash flow (85.2%).

Interest Coverage: PLCE's interest payments on its debt are well covered by EBIT (12x coverage).


Balance Sheet

Inventory Level: PLCE has a high level of physical assets or inventory.

Debt Coverage by Assets: PLCE's debt is covered by short term assets (assets are 2.8x debt).


Next Steps

Dividend

What is Children's Place's current dividend yield, its reliability and sustainability?

3.46%

Current Dividend Yield


Dividend Yield vs Market

company3.5%marketbottom25%1.4%markettop25%3.7%industryaverage1.8%forecastin3Years3.6%

Current dividend yield vs market & industry

Notable Dividend: PLCE's dividend (3.36%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: PLCE's dividend (3.36%) is low compared to the top 25% of dividend payers in the US market (3.66%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, PLCE has been paying a dividend for less than 10 years.

Growing Dividend: PLCE's dividend payments have increased, but the company has only paid a dividend for 6 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (56.5%), PLCE's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: PLCE's dividends in 3 years are forecast to be well covered by earnings (36.6% payout ratio).


Next Steps

Management

What is the CEO of Children's Place's salary, the management and board of directors tenure and is there insider trading?

2.5yrs

Average management tenure


CEO

Jane Elfers (58yo)

10yrs

Tenure

US$1,238,176

Compensation

Ms. Jane T. Elfers has been President of Global Product at The Children's Place Inc since November 2, 2018. She has been the Chief Executive Officer and President of The Children's Place Inc. (alternate na ...


CEO Compensation Analysis

Compensation vs Market: Jane's total compensation ($USD1.24M) is below average for companies of similar size in the US market ($USD2.53M).

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


Management Age and Tenure

2.5yrs

Average Tenure

57.5yo

Average Age

Experienced Management: PLCE's management team is considered experienced (2.5 years average tenure).


Board Age and Tenure

4.7yrs

Average Tenure

67.5yo

Average Age

Experienced Board: PLCE's board of directors are considered experienced (4.7 years average tenure).


Insider Trading

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


Recent Insider Transactions

BuyUS$156,24017 Dec 19
John Bachman
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares2,800
Max PriceUS$55.80
BuyUS$576,90017 Dec 19
Norman Matthews
EntityIndividual
Role
Chairman of the Board
Independent Chairman
Shares10,000
Max PriceUS$57.69
BuyUS$281,60016 Dec 19
Michael Scarpa
EntityIndividual
Role
Chief Financial Officer
COO, CFO & Executive VP
Shares5,000
Max PriceUS$56.32
BuyUS$1,005,27416 Dec 19
Jane Elfers
EntityIndividual
Role
Chief Executive Officer
CEO, President & Director
Shares18,100
Max PriceUS$55.54
SellUS$99,72421 May 19
Claudia Lima-Guinehut
EntityIndividual
Shares932
Max PriceUS$107.00

Ownership Breakdown

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


Management Team

  • Mike Scarpa (63yo)

    COO, CFO & Executive VP

    • Tenure: 1.2yrs
    • Compensation: US$1.79m
  • Jane Elfers (58yo)

    CEO, President & Director

    • Tenure: 10yrs
    • Compensation: US$1.24m
  • Greg Poole (57yo)

    Chief Sourcing Officer

    • Tenure: 7.3yrs
    • Compensation: US$3.05m
  • Kevin Low (47yo)

    Senior Vice President of Stores Operations

    • Compensation: US$1.81m
  • Jennifer Groves

    Senior Vice President of Design & Brand Creative

    • Tenure: 3.8yrs
  • Chris LaBrosse

    Senior Vice President of Store Development & Global Logistics

    • Tenure: 3.8yrs
  • Leah Swan

    Chief Administrative Officer

    • Tenure: 0.5yrs
  • Anthony Attardo

    Director of Investor Relations

    • Rajat Jain

      Chief Technology Officer

      • Tenure: 1yrs
    • Robert Karpf

      Senior VP

      • Tenure: 0.2yrs

    Board Members

    • Elizabeth Boland (59yo)

      Independent Director

      • Tenure: 0.7yrs
    • Norm Matthews (86yo)

      Independent Chairman

      • Tenure: 10.3yrs
      • Compensation: US$310.56k
    • Joe Alutto (77yo)

      Independent Director

      • Tenure: 11.7yrs
      • Compensation: US$178.04k
    • Joe Gromek (72yo)

      Independent Director

      • Tenure: 8.8yrs
      • Compensation: US$187.54k
    • Jane Elfers (58yo)

      CEO, President & Director

      • Tenure: 10yrs
      • Compensation: US$1.24m
    • Bob Mettler (78yo)

      Independent Director

      • Tenure: 4.7yrs
      • Compensation: US$167.54k
    • Marla Beck (49yo)

      Independent Director

      • Tenure: 4.3yrs
      • Compensation: US$173.54k
    • Debby Reiner

      Independent Director

      • Tenure: 0.7yrs
    • Jeb Bachman (63yo)

      Independent Director

      • Tenure: 3.8yrs
      • Compensation: US$198.54k

    Company Information

    The Children's Place, Inc.'s company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: The Children's Place, Inc.
    • Ticker: PLCE
    • Exchange: NasdaqGS
    • Founded: 1969
    • Industry: Apparel Retail
    • Sector: Retail
    • Market Cap: US$984.032m
    • Shares outstanding: 15.06m
    • Website: https://www.childrensplace.com

    Number of Employees


    Location

    • The Children's Place, Inc.
    • 500 Plaza Drive
    • Secaucus
    • New Jersey
    • 7094
    • United States

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    PLCENasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDSep 1997
    CP5DB (Deutsche Boerse AG)YesCommon StockDEEURSep 1997

    Biography

    The Children's Place, Inc. operates as a children's specialty apparel retailer. The company operates through two segments, The Children's Place U.S. and The Children's Place International. It sells apparel, footwear, accessories, and other items for children; and designs, contracts to manufacture, and sells merchandise under the proprietary The Children's Place, Place, and Baby Place brand names. As of February 2, 2019, the company operated 972 stores in the United States, Canada, and Puerto Rico; and 217 international points of distribution operated by its 8 franchise partners in 20 countries. It also sells its products through childrensplace.com, an online store. The company was formerly known as The Children's Place Retail Stores, Inc. and changed its name to The Children's Place, Inc. in June 2014. The Children's Place, Inc. was founded in 1969 and is headquartered in Secaucus, New Jersey. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/17 23:35
    End of Day Share Price2020/01/17 00:00
    Earnings2019/11/02
    Annual Earnings2019/02/02


    Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.