A Look At Victoria's Secret (VSCO) Valuation As Brand Recovery Draws Greenlight Capital's Support

Victoria's Secret (VSCO) has moved back into focus after Greenlight Capital named it a top contributor in its Q4 2025 letter, citing brand recovery, stronger operations, and renewed investor interest.

See our latest analysis for Victoria's Secret.

The share price has cooled slightly in the last week, with a 7 day share price return of 6.93% and a 1 day share price return of a 2.66% decline. However, the 90 day share price return of 54.11% and 1 year total shareholder return of 56.14% point to strong momentum that investors are linking to the brand turnaround narrative and recent earnings and hedge fund commentary.

If Victoria's Secret's rebound has you rethinking retail opportunities, this could be a good moment to cast the net wider and check out fast growing stocks with high insider ownership.

After a sharp move higher, and with the stock trading at a roughly 15% discount to the average analyst price target and a flagged intrinsic discount near 42%, you have to ask: is there still a buying opportunity here, or is the market already pricing in future growth?

Most Popular Narrative: 75% Overvalued

With Victoria's Secret last closing at $54.51 against a narrative fair value of $31.20, the most followed valuation story sees the price as stretched and built on tight margins.

The ongoing transformation of Victoria's Secret toward inclusivity, body positivity, and enhanced storytelling continues to resonate with younger customers and drive new customer acquisition, especially among the 18-44 demographic, supporting sustained revenue and market share growth.

Momentum in omnichannel growth including robust international expansion (notably in China and other emerging markets) and digital channel strength positions the brand to benefit from rising global middle-class demand, leading to higher topline revenue and improved operating leverage.

Read the complete narrative.

Want to see what kind of revenue grind, margin shape, and future earnings multiple have to line up to justify that gap? The narrative describes one very specific earnings path and a higher future P/E that needs to hold. The full story connects brand rebuild, omnichannel ambitions, and valuation in a way the share price alone does not show.

Result: Fair Value of $31.20 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, tariff headwinds projected at $100 million for fiscal 2025, along with pressure on mall based stores, could quickly challenge the margin story investors are leaning on.

Find out about the key risks to this Victoria's Secret narrative.

Another View: Cash Flows Tell a Different Story

While the popular narrative pegs Victoria's Secret at around $31.20 and labels the stock as overvalued, our DCF model points the other way. In this view, the shares at $54.51 sit roughly 41.5% below an estimated future cash flow value of $93.22, suggesting a very different risk reward trade off.

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Victoria's Secret for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 887 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Victoria's Secret Narrative

If you read these views and feel they miss something, or you simply prefer testing the numbers yourself, you can shape your own narrative in minutes with Do it your way.

A great starting point for your Victoria's Secret research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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