G-III Apparel Group (GIII:NAS) Fundamental Valuation Report

G-III Apparel Group (GIII:NAS) Fundamental Valuation Report

Fundamental Valuation Report

G-III Apparel Group(GIII:NAS)

Consumer Cyclical:Apparel Retail

This Report was generated using the valuation tools available on StockCalc.com. For a free 30 day trial click here.

Close Price/Date
$32.49 (USD) 04/30/2021

Weighted Valuation
$33.32 (USD)

Overall Rating
Fairly valued to slightly Undervalued by 2.6%

Valuation Models Comparables: $34.17 (USD)
Valuation Methods This company is:
Cash Flow: Overvalued on a Cash Flow Valuation
Comparable Company: Undervalued on a Comparable Valuation
Asset: Undervalued on an Asset Valuation
According to Analyst consensus at $34.00 this stock is Fairly valued

Company Overview (GIII:NAS USD)

Price 32.49
Range 31.55 – 33.11
52 week 8.48 – 34.61
Open 32.61
Vol / Avg. 446314/390394
Mkt cap 1.57B
P/E 67.69
Div/yield 0.00/0.00
EPS 0.48
Shares 48.38M
Beta 3.01

Company Description

G-III Apparel Group Ltd is a textile company. It makes a wide range of apparel, footwear, and accessories that it sells under its own brands, licensed brands, and private-label brands. G-III has a substantial portfolio for licensed and proprietary brands, anchored by five global power brands: DKNY, Donna Karan, Calvin Klein, Tommy Hilfiger, and Karl Lagerfeld. The company has two reportable operations: Wholesale Operations and Retail Operations. The Wholesale operations segment includes sales of products under brands licensed by us from third parties, as well as sales of products under its own brands and private label brands. The retail operations segment consists primarily of Wilsons Leather, G.H. Bass, and DKNY retail stores. It derives most of its revenues from Wholesale operations.

Valuation Details

 We have up to 6 valuation points for each company. Details are at the bottom of the report.

Discounted Cash Flow and Sensitivity Analysis for GIII:NAS

Using a discounted cash flow model we generated an intrinsic value of $15.83 (USD) for GIII:NAS

Sensitivity Analysis

(showing how changes in the input variables impact the DCF calculation)

GIII:NAS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $15.83 1% 5% 1% 5%
WACC (or Ke) 12.79 $17.66 $14.34
Terminal Growth Rate 3.00 $14.48 $17.49
Tax Rate 0.34 $18.27 $13.39
Cash Flow 253,483,000 $14.22 $17.44
Capital Expenditures -1,239,400 $15.82 $15.84
Long Term Debt 0 $15.83 $15.83

* Changes are absolute: ex WACC from 8% to 7%

Comparables Model

Using similar companies and price based ratios we generated a valuation of $34.17 (USD) for GIII:NAS. We also generated a valuation of $50.79 (USD) using other metrics and comparables.
The comparable companies were Duluth Holdings (DLTH:NAS), Boot Barn Holdings (BOOT:NYS), Tilly’s (TLYS:NYS), Urban Outfitters (URBN:NAS) and Guess (GES:NYS).

Company GIII:NAS End Date Value
Earnings/Share $0.48 (USD)
Book Value/Share $27.62 (USD)
Sales/Share $42.13 (USD)
Cash Flow/Share $1.53 (USD)
EBITDA/Share $2.56 (USD)
Price Based on Comps Adjustment Factor (%)
$21.38 (USD) -25.1
$89.80 (USD) -58.0
$50.29 (USD) -44.0
$3.66 (USD) 71.7
$65.14 (USD) 13.9
GIII:NAS Ratios Used Average Values DLTH:NAS BOOT:NYS TLYS:NYS URBN:NAS GES:NYS
67.69 PE Ratio 1226.36 37.45 51.62 0.00 3590.00 0.00
1.18 PB Ratio 3.25 2.68 5.70 2.29 2.39 3.21
0.77 PS Ratio 1.19 0.80 2.53 0.68 1.03 0.92
21.20 PCF Ratio 11.99 10.10 19.84 9.31 12.38 8.30
15.54 EV to EBITDA 25.48 13.41 19.06 30.75 38.71 0.00

Multiples

Using a multiples approach we generated a valuation of  $23.16 (USD) for GIII:NAS

Company GIII:NAS End Date Value
Earnings/Share $0.48 (USD)
Book Value/Share $27.62 (USD)
Sales/Share $42.13 (USD)
Cash Flow/Share $1.53 (USD)
EBITDA/Share $2.56 (USD)
Price Based on Comps Adjustment Factor
$8.36 (USD) 0
$35.83 (USD) 0
$22.98 (USD) 0
$25.82 (USD) 0
$22.84 (USD) 0
Ratios Ratio Average
PE Ratio 17.41
PB Ratio 1.30
PS Ratio 0.55
PCF Ratio 16.85
EV to EBITDA 8.93

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  GIII:NAS for the last 10 years was  1.54

We ran the Adjusted Book Value for  GIII:NAS and generated a book value of  $27.62 (USD)
By multiplying these we get an adjusted valuation of  $42.66 (USD)

Analyst Data

In the Stockcalc database there are 1 analysts that provide a valuation for GIII:NAS. The 1 analysts have a concensus valuation for GIII:NAS for 2022 of $34.00 (USD).

GIII:NAS G-III Apparel Group

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
0 1 0 3.0000 Hold 2021-4-29

Current Price: 32.49 USD

Analyst Consensus
USD Millions 2022 2023 2024
Mean EPS 2.40 2.71 2.75
# EPS Analysts 1 1 1
Mean Revenue 2,485.50 2,607.50 2,649.80
# Revenue Analysts 1 1 1
Mean Target Price 34.00
Mean Cash Flow 3.07 3.48 3.61
Mean EBITDA 223.80 243.20 246.10
Mean Net Income 116.20 128.80 128.80
Mean Debt Outstanding
Mean Tax Rate
Mean Growth Rate
Mean Capital Expenditure 37.30 39.10 39.70

Explanation of Valuation Models

We have up to 6 valuation points for each company in the database.

The Discounted Cash Flow (DCF) valuation is a cash flow model where cash flow projections are discounted back to the present to calculate value per share. DCF is a common valuation technique especially for companies undergoing irregular cash flows such as resource companies (mining, forestry, oil and gas) going though price cycles or smaller companies about to generate cash flow (junior exploration companies, junior pharma, technology firms…).

The Price Comparables valuation is the result of valuing the company we are looking at on the basis of ratios from selected comparable companies: Price to Earnings, Price to Book, Price to Sales, Price to Cash Flow, Enterprise Value (EV) to EBITDA. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

We have included the Other Comparables as a way to value companies that cannot be valued using Earnings based ratios. This technique is very useful for companies still experiencing negative cash flows such as mining exploration firms. We use Cash/Share, Book Value/Share, MarketCap, 1 Year Return, NetPPE as the ratios here. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

Multiples are similar to Price comparables where we look at current or historic ratios for the company in question to assess what it should be worth today based on those historic ratios. We use the same 5 ratios as in the price comparables and value the company with its historic averages.

With Adjusted Book Value (ABV) we calculate the book value per share for the company based on its balance sheet and multiply that book value per share by its historical price to book ratio to calculate a value per share.

If we have Analyst coverage for the company we use the consensus target price here.

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