Zumiez (NasdaqGS:ZUMZ) - Share price, News & Analysis

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

ZUMZ ($27.01) is trading below our estimate of [[fair value]] ($38.27)

ZUMZ fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	0/6
Past Performance	3/6
Financial Health	6/6
Dividends	0/6

ZUMZ Stock Overview

Zumiez Inc., together with its subsidiaries, operates as a specialty retailer of apparel, footwear, accessories, and hardgoods for young men and women.

Rewards

Trading at 29.4% below our estimate of its fair value

Risk Analysis

Earnings are forecast to decline by an average of 4% per year for the next 3 years

Zumiez Competitors

Shoe Carnival

NasdaqGS:SCVL

US$658.0m

Children's Place

NasdaqGS:PLCE

US$614.2m

Genesco

NYSE:GCO

US$816.0m

Chico's FAS

NYSE:CHS

US$747.1m

Price History & Performance

Summary of all time highs, changes and price drops for Zumiez
Historical stock prices
Current Share Price	US$27.01
52 Week High	US$55.10
52 Week Low	US$24.02
Beta	1.53
1 Month Change	5.18%
3 Month Change	-17.25%
1 Year Change	-37.95%
3 Year Change	14.69%
5 Year Change	129.87%
Change since IPO	117.21%

Recent News & Updates

Jul 28

Zumiez: Not Long Now Until We Have Our Long-Term Bottom

Zumiez shares this month attempting a long-term bottom, but momentum was rejected by its 10-week moving average. One forward estimates case their bearish trends, this stock should rally aggressively. We await a convincing swing low before we put capital to work. Intro We wrote about Zumiez Inc. (ZUMZ) back in April of this year when we foresaw more declines in the stock price. The reasoning for our bearishness at the time was the apparent falloff in growth in the company, which coincided with a valuation that was only in line with historic multiples (Not Cheap Enough For Us). Furthermore, the deteriorating technicals were signaling that the stock's 2019 highs would at least get tested in its down move at the time. As we can see from the long-term weekly chart below, however, even support at this level was not able to stop the selling. In fact, selling has intensified to the downside in recent months, resulting in shares of Zumiez Inc. (ZUMZ) now finding themselves just above the $26 handle. Zumiez Technical Chart (Stockcharts.com) Furthermore, as we can see above, Zumiez's 10-week moving average rejected the mid-July 2022 rally, which means shares still have not registered a weekly MACD crossover buy signal. When this takes place (given how oversold shares remain), we expect at least a rally up those 2019 highs (Previous support which now becomes resistance) once more. Whether shares will have enough momentum to punch through this level in time remains to be seen. Investors need to be patient, however, before a confirmed weekly swing (on strong volume) is confirmed here. We state this because getting our bottom may be a long-drawn-out process, especially when one views how forward-looking sales and revenues have been dropping in recent months. For the upcoming second quarter, for example, management guided between $232 & $239 million in top-line sales on the first quarter earnings call, but unless trends change here for the better, Zumiez's Q2 sales may even come in below management's guidance range released just eight weeks ago. Patient long-term investors eyeing up this name may not care in the slightest. Zumiez continues to report no debt on its balance sheet and is now selling a forward sales multiple of 0.47. The value is there for everyone to see, but the market remains uninterested due to how profitability has been getting hammered in recent times. Sluggish Sales Affecting Everything In the first quarter this year, for example, management cited the tapering off of the US stimulus this year as well as high inflation for the dropoff in sales in that period. Therefore, taking into account the dropoff in sales from the higher margin US segment as well as the higher cost of revenues (lower gross margin) & higher SG&A costs, operating profit barely came in profitable for the first quarter compared to $34+ million in EBIT in the same period of 12 months prior.

Jul 20

Why The 22% Return On Capital At Zumiez (NASDAQ:ZUMZ) Should Have Your Attention

What trends should we look for it we want to identify stocks that can multiply in value over the long term? Typically...

Jun 09

An Intrinsic Calculation For Zumiez Inc. (NASDAQ:ZUMZ) Suggests It's 29% Undervalued

Today we'll do a simple run through of a valuation method used to estimate the attractiveness of Zumiez Inc...

Shareholder Returns

	ZUMZ	US Specialty Retail	US Market
7D	1.9%	2.8%	0.3%
1Y	-38.0%	-34.0%	-13.5%

Return vs Industry: ZUMZ underperformed the US Specialty Retail industry which returned -29.6% over the past year.

Return vs Market: ZUMZ underperformed the US Market which returned -13% over the past year.

Price Volatility

Is ZUMZ's price volatile compared to industry and market?
ZUMZ volatility
ZUMZ Average Weekly Movement	7.9%
Specialty Retail Industry Average Movement	8.9%
Market Average Movement	7.9%
10% most volatile stocks in US Market	17.2%
10% least volatile stocks in US Market	3.2%

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

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

About the Company

Founded	Employees	CEO	Website
1978	6,000	Rick Brooks	https://www.zumiez.com

Zumiez Inc., together with its subsidiaries, operates as a specialty retailer of apparel, footwear, accessories, and hardgoods for young men and women. Its hardgoods include skateboards, snowboards, bindings, components, and other equipment. As of February 26, 2022, the company operated 738 stores, including 602 stores in the United States, 52 stores in Canada, 67 stores in Europe, and 17 stores in Australia under the names of Zumiez, Blue Tomato, and Fast Times.

Zumiez Fundamentals Summary

How do Zumiez's earnings and revenue compare to its market cap?
ZUMZ fundamental statistics
Market Cap	US$525.60m
Earnings (TTM)	US$92.51m
Revenue (TTM)	US$1.13b

5.7x

P/E Ratio

0.5x

P/S Ratio

Is ZUMZ overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
ZUMZ income statement (TTM)
Revenue	US$1.13b
Cost of Revenue	US$697.45m
Gross Profit	US$428.04m
Other Expenses	US$335.53m
Earnings	US$92.51m

Last Reported Earnings

Apr 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	4.75
Gross Margin	38.03%
Net Profit Margin	8.22%
Debt/Equity Ratio	0%

How did ZUMZ perform over the long term?

See historical performance and comparison

We’ve recently updated our valuation analysis.

Valuation

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

Valuation Score

5/6

Valuation Score 5/6

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 ZUMZ?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for ZUMZ. This is calculated by dividing ZUMZ's market cap by their current preferred multiple.
What is ZUMZ's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$525.60m

ZUMZ 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	0.6x
Enterprise Value/EBITDA	4.2x
PEG Ratio	-1.4x

Price to Earnings Ratio vs Peers

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

ZUMZ PE Ratio vs Peers

The above table shows the PE ratio for ZUMZ vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	6.1x
SCVL Shoe Carnival	4.7x	n/a	US$658.0m
PLCE Children's Place	3.8x	-9.9%	US$614.2m
GCO Genesco	7.4x	n/a	US$816.0m
CHS Chico's FAS	8.3x	n/a	US$747.1m
ZUMZ Zumiez	5.7x	-4.0%	US$525.6m

Price-To-Earnings vs Peers: ZUMZ is good value based on its Price-To-Earnings Ratio (5.7x) compared to the peer average (6.1x).

Price to Earnings Ratio vs Industry

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

Price-To-Earnings vs Industry: ZUMZ is good value based on its Price-To-Earnings Ratio (5.7x) compared to the US Specialty Retail industry average (6.6x)

Price to Earnings Ratio vs Fair Ratio

What is ZUMZ'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.

ZUMZ PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	5.7x
Fair PE Ratio	8x

Price-To-Earnings vs Fair Ratio: ZUMZ is good value based on its Price-To-Earnings Ratio (5.7x) compared to the estimated Fair Price-To-Earnings Ratio (8x).

Share Price vs Fair Value

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

Below Fair Value: ZUMZ ($27.01) is trading below our estimate of fair value ($38.27)

Significantly Below Fair Value: ZUMZ 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: Target price is more than 20% higher than the current share price, but there are not enough analysts covering the stock to determine statistical confidence in agreement.

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Future Growth

How is Zumiez forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

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

-4.0%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: ZUMZ's earnings are forecast to decline over the next 3 years (-4% per year).

Earnings vs Market: ZUMZ's earnings are forecast to decline over the next 3 years (-4% per year).

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

Revenue vs Market: ZUMZ's revenue (3.2% per year) is forecast to grow slower than the US market (7.9% per year).

High Growth Revenue: ZUMZ's revenue (3.2% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: ZUMZ's Return on Equity is forecast to be low in 3 years time (16.5%).

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Past Performance

How has Zumiez 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

33.3%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: ZUMZ has high quality earnings.

Growing Profit Margin: ZUMZ's current net profit margins (8.2%) are lower than last year (10.9%).

Past Earnings Growth Analysis

Earnings Trend: ZUMZ's earnings have grown significantly by 33.3% per year over the past 5 years.

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

Earnings vs Industry: ZUMZ had negative earnings growth (-24.9%) over the past year, making it difficult to compare to the Specialty Retail industry average (30.2%).

Return on Equity

High ROE: ZUMZ's Return on Equity (24.5%) is considered high.

Discover strong past performing companies

Financial Health

How is Zumiez'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: ZUMZ's short term assets ($348.8M) exceed its short term liabilities ($178.3M).

Long Term Liabilities: ZUMZ's short term assets ($348.8M) exceed its long term liabilities ($212.9M).

Debt to Equity History and Analysis

Debt Level: ZUMZ is debt free.

Reducing Debt: ZUMZ had no debt 5 years ago.

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

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

Balance Sheet

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Dividend

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

Dividend Score

0/6

Dividend Score 0/6

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

Dividend Yield vs Market

Notable Dividend: Unable to evaluate ZUMZ's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate ZUMZ's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.

Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if ZUMZ's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if ZUMZ's dividend payments have been increasing.

Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as ZUMZ has not reported any payouts.

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Management

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

10.0yrs

Average management tenure

CEO

Rick Brooks (62 yo)

22.17yrs

Tenure

US$2,474,467

Compensation

Mr. Richard M. Brooks, also known as Rick, Jr., has been the Chief Executive Officer of Zumiez Inc. since June 2000 and served as its Acting Chief Financial Officer from June 2011 to August 2011. Mr. Brook...

CEO Compensation Analysis

Compensation vs Market: Rick's total compensation ($USD2.47M) is about average for companies of similar size in the US market ($USD2.66M).

Compensation vs Earnings: Rick's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.

Leadership Team

Experienced Management: ZUMZ's management team is seasoned and experienced (10 years average tenure).

Board Members

Experienced Board: ZUMZ's board of directors are considered experienced (3.1 years average tenure).

Ownership

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

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

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

Data	Last Updated (UTC time)
Company Analysis	2022/08/09 00:00
End of Day Share Price	2022/08/09 00:00
Earnings	2022/04/30
Annual Earnings	2022/01/29