Should You Buy or Sell Foot Locker Stock Today?
Foot Locker (NYSE: FL) is a $7.68 billion company today. Investors that bought shares one year ago are sitting on a 0.4% total return. That's below the S&P 500's return of 14.65%.
Foot Locker stock is underperforming the market. It's beaten down, and it missed earnings expectations today. Does that make it a good value buy? To answer this question, we've turned to the Investment U Stock Grader. Our Research Team built this system to diagnose the financial health of a company.
Our system looks at six key metrics...
✗ Earnings-per-Share (EPS) Growth: Foot Locker reported a recent EPS growth rate of 24.56%. That's below the consumer discretionary sector average of 79.34%. That's not a good sign. We like to see companies that have higher earnings growth.
✓ Price-to-Earnings (P/E): The average price-to-earnings ratio of the consumer discretionary sector is 27.24. And Foot Locker's ratio comes in at 12.35. It's trading at a better value than many of its competitors.
✓ Debt-to-Equity : The debt-to-equity ratio for Foot Locker stock is 4.69%. That's below the consumer discretionary sector average of 100.91%. The company is less leveraged.
✗ Free Cash Flow per Share Growth : Foot Locker's FCF has been lower than that of its competitors over the last year. That's not good for investors. In general, if a company is growing its FCF, it will be able to pay down debt, buy back stock, pay out more in dividends and/or invest money back into the business to help boost growth. It's one of our most important fundamental factors.
✗ Profit Margins : The profit margin of Foot Locker comes in at 8.94% today. And generally, the higher, the better. We also like to see this margin above that of its competitors. Foot Locker's profit margin is below the consumer discretionary average of 11.86%. So that's a negative indicator for investors.
✗ Return on Equity : Return on equity tells us how much profit a company produces with the money shareholders invest. The ROE for Foot Locker is 25.23%, and that's below its industry average ROE of 27.83%.
Foot Locker stock passes two of our six key metrics today. That's why our Investment U Stock Grader rates it as a Hold With Caution.
Please note that our fundamental factor checklist is just the first step in performing your own due diligence. There are many other factors you should consider before investing. That's why The Oxford Club offers more than a dozen newsletters and trading advisories all aimed at helping investors grow and maintain their wealth. For more details, click here.