Is G III Apparel Group (GIII) Cheap Following Its Recent Rebound?

G-III Apparel Group (GIII) has drawn fresh attention after recent share moves, with the price last closing at US$28.40. Short term performance has been mixed, while longer horizons show relatively modest total returns.

For G-III Apparel Group, recent trading has tilted positive, with a 1-day share price return of 3.27% and a 7-day share price gain of 6.09%, partially offsetting a 90-day share price decline of 19.82% and a year-to-date share price fall of 3.76%.

That mix of short-term strength and weaker three month share price performance hints at investors reassessing both growth potential and risk. At the same time, the 1-year total shareholder return of 5.44% and 3-year total shareholder return of 15.09% show how reinvested gains have contributed to more moderate progress over time.

Scan beyond G-III Apparel Group and compare its recent swings with a curated 33 high quality undervalued stocks that combine resilient cash flows with balance sheets built to handle bumps in sentiment.

G-III Apparel Group has bounced in the last week yet still trails its recent 90 day slide, which leaves a simple tension. Has most of the easy upside already played out, or is the valuation still leaving room?

Most Popular Narrative: 18.3% Undervalued

On the narrative view, G-III Apparel Group screens as undervalued, with an assessed fair value of $34.75 against the recent $28.40 close. The gap rests on how convincingly owned brands can replace expiring licenses.

Ongoing replacement of Calvin Klein and Tommy Hilfiger licenses with higher margin owned brands such as DKNY, Donna Karan, Karl Lagerfeld and Marc Jacobs, with roughly US$700 million of the anticipated US$1.2b revenue loss already offset, could continue to support revenue and gross margin mix.

See why 3 investors see G-III Apparel Group as 18% undervalued.

Result: Fair Value of $34.75 (UNDERVALUED)

Still, this story can break if the remaining Calvin Klein and Tommy Hilfiger revenue rolls off faster than the pace at which G-III Apparel Group scales its owned labels and Marc Jacobs.

Find out about the key risks to this G-III Apparel Group narrative.

Another View: G-III Apparel Group Through A Cash Flow Lens

That upbeat fair value of $34.75 for G-III Apparel Group sits uneasily next to our DCF model, which puts the future cash flow value at $23.58 while the shares last closed at $28.40. On this measure, the stock screens as overvalued, so which story do you lean toward?

If you want to see how those cash flow assumptions are built line by line, you can review the SWS DCF model in more detail here 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 G-III Apparel Group 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 33 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

Mixed signals on G-III Apparel Group can feel messy. Move quickly, review the underlying data, and weigh both the 1 key reward and 2 important warning signs.

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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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