On Tuesday, Citi reaffirmed its Buy rating on Yeti Holdings Inc. (NYSE:YETI), with a steady price target of $49.00. The firm's analysis indicated a slowdown in global web traffic to Yeti's website, noting a year-over-year (Y/Y) decline in March. The average number of unique visitors globally dropped by 4.7% Y/Y, contrasting with a 1.5% increase in February and a significant 19.6% rise in January. The two-year average growth rates for these months were +5.2%, +9.9%, and +12.4%, respectively.
Total web traffic visits also saw a marginal decrease of 0.6% Y/Y in March, although the two-year average showed a robust increase of +13.0%. This was a downtick from February's impressive +14.5% Y/Y growth (two-year average +15.5%) and January's surge of +27.6% Y/Y (two-year average +14.4%).
In anticipation of Yeti's first-quarter 2024 earnings report scheduled for May 9, Citi has adjusted its sales and earnings per share (EPS) estimates for the quarter. The new projections suggest an 8% Y/Y increase in sales and an EPS of $0.21, primarily due to expectations of weaker direct-to-consumer (DTC) sales.
For the full year of 2024, Citi has set its sales growth forecast at 7.7% Y/Y and an EPS of $2.50. The adjusted EPS estimates for the second to fourth quarters of 2024 factor in the potential benefits of a reduced share count resulting from Yeti's Accelerated Share Repurchase (ASR) program.
InvestingPro Insights
As Yeti Holdings Inc. (NYSE:YETI) navigates through a period of fluctuating web traffic and prepares for its upcoming earnings report, investors are considering various financial metrics and analyst insights to gauge the company's performance and potential. According to recent data, Yeti's market capitalization stands at $3.1 billion, with a P/E ratio of 18.52, reflecting a valuation that may be appealing given its near-term earnings growth potential. Additionally, Yeti's PEG ratio, which measures the price of a stock relative to its earnings growth, is notably low at 0.21, suggesting that the stock could be undervalued based on future earnings expectations.
From a liquidity standpoint, Yeti's ability to cover short-term obligations is robust, with liquid assets surpassing short-term liabilities. This financial stability is complemented by the company's cash flows, which are strong enough to cover interest payments comfortably. Yeti's stock has experienced significant volatility in recent months, currently trading near its 52-week low and having seen a price decline of over 20% in the last three months. Despite these challenges, analysts predict Yeti will remain profitable this year, a sentiment supported by the company's positive gross profit margin of 56.86% for the last twelve months as of Q1 2023.
For investors seeking further analysis and additional "InvestingPro Tips," Yeti currently has 10 more tips available on InvestingPro, offering deeper insights into the company's financial health and stock performance. These include observations on Yeti's trading patterns, balance sheet strengths, and earnings forecasts. To access these valuable tips and enhance your investment strategy, consider using the coupon code PRONEWS24 to get an extra 10% off a yearly or biyearly Pro and Pro+ subscription.
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