Burlington Stores Inc (BURL, Financial) has recently experienced a notable uptick in its stock performance. With a market capitalization of $12.41 billion, the company's shares are currently trading at $192.33. Over the past week, the stock has seen a 4.45% gain, while the past three months have been even more impressive, with a 30.36% increase. This surge in stock price has brought the company's valuation closer to its GF Value of $219.75, which suggests that the stock is modestly undervalued. This is a shift from three months ago when the stock was considered significantly undervalued with a past GF Value of $241.7.
Introduction to Burlington Stores Inc
Burlington Stores Inc, operating within the cyclical retail industry, is the third-largest American off-price apparel and home fashion retailer. As of the end of fiscal 2022, the company boasts 927 stores across the United States, offering a wide range of products from over 5,000 brands. Burlington Stores is known for its "treasure-hunt" shopping experience, providing customers with significant discounts of up to 60% compared to traditional retailers. The company's sales are diversified across various categories, with accessories and footwear, women's ready-to-wear apparel, home décor, menswear, youth apparel and baby, and outerwear all contributing to its revenue stream.
Assessing Burlington's Profitability
Burlington Stores Inc holds a strong Profitability Rank of 8 out of 10, indicating robust financial health and a high likelihood of maintaining profitability. The company's operating margin stands at 5.28%, outperforming 60.05% of its 1,109 industry peers. Its return on equity (ROE) is an impressive 38.02%, surpassing 93.01% of 1,088 companies in the same sector. Additionally, Burlington's return on assets (ROA) and return on invested capital (ROIC) are 4.16% and 6.08%, respectively, both better than over 62% of their industry counterparts. The company has also maintained profitability for 9 out of the past 10 years, which is better than 71.25% of 1,047 companies.
Growth Trajectory of Burlington Stores
The Growth Rank for Burlington Stores is currently at 4 out of 10. The company's 3-year revenue growth rate per share is 6.80%, which is higher than 58.06% of 1,042 companies in the same industry. Over a 5-year period, the revenue growth rate per share increases to 8.70%, outperforming 71.4% of 916 companies. Looking ahead, the estimated total revenue growth rate for the next 3 to 5 years is 4.71%, which is better than 42.68% of 239 companies. However, the 3-year EPS without NRI growth rate stands at -17.60%, which is only better than 20% of 835 companies, indicating some challenges in earnings growth.
Notable Shareholders in Burlington Stores
Several prominent investors hold significant stakes in Burlington Stores Inc. PRIMECAP Management (Trades, Portfolio) leads the pack with 622,200 shares, representing a 0.96% share percentage. Following closely is Steven Cohen (Trades, Portfolio), holding 445,741 shares, which equates to a 0.69% share percentage. Jim Simons (Trades, Portfolio) also has a notable position with 273,200 shares, accounting for 0.42% of the company's shares.
Competitive Landscape
When comparing Burlington Stores to its competitors, it stands out with a higher market capitalization. Gap Inc (GPS, Financial) has a market cap of $7.93 billion, American Eagle Outfitters Inc (AEO, Financial) is valued at $4.13 billion, and Urban Outfitters Inc (URBN, Financial) comes in at $3.48 billion. This indicates that Burlington Stores holds a stronger position in the market relative to these competitors.
Conclusion: Burlington Stores' Market Position and Valuation
In summary, Burlington Stores Inc has demonstrated a strong stock performance with significant gains over the past three months. The company's profitability metrics are robust, with a high Profitability Rank and superior operating margin, ROE, ROA, and ROIC compared to many of its peers. While its Growth Rank is moderate, the company has shown consistent revenue growth. The current valuation suggests that the stock is modestly undervalued relative to its GF Value, indicating potential for further growth. Considering the company's industry rank and financial metrics, the recent stock price changes reflect a positive outlook for Burlington Stores in the competitive retail landscape.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
