Natura &Co Holding SA (NTCO, Financial) has experienced a significant fluctuation in its stock price over recent periods. The company's market capitalization stands at $4.57 billion, with a current price of $6.62 per share. Over the past week, the stock has seen a decline of 10.39%, yet when looking at the past three months, there has been an impressive gain of 27.25%. According to GF Value, the stock is currently fairly valued at $6.45, a slight adjustment from the past GF Value of $8.12, which indicated the stock was modestly undervalued. This recent performance suggests a volatile yet upward trend for Natura &Co's stock, capturing the attention of investors and market analysts alike.
Understanding Natura &Co Holding SA
Natura &Co Holding SA is a prominent player in the consumer packaged goods industry, specializing in cosmetics, hygiene, and beauty products. The company boasts a diverse portfolio with operations under the Natura, The Body Shop, and Aesop brand names across various continents. With a strategic focus on Latin America and Brazil, Natura &Co has structured its business into four main segments, each contributing to its substantial operating revenues. The company's international presence and brand diversity are key factors in its market performance and growth strategy.
Assessing Profitability
Natura &Co's Profitability Rank is a robust 7 out of 10, indicating a strong position within its industry. The company's operating margin of 3.03% is better than 41.74% of its peers in the sector. Furthermore, its return on equity (ROE) of 20.49% surpasses 86.48% of companies, showcasing its efficiency in generating profits from shareholders' equity. The return on assets (ROA) stands at 9.01%, outperforming 82.89% of companies, while the return on invested capital (ROIC) at 1.87% is better than 38.35% of companies. These figures, particularly the high ROE and ROA, reflect Natura &Co's ability to effectively utilize its resources to generate earnings. However, with only four years of profitability over the past decade, there is room for improvement in maintaining consistent financial performance.
Growth Trajectory
The company's Growth Rank stands at an impressive 8 out of 10. Natura &Co's 3-year revenue growth rate per share is 17.00%, which is higher than 76.7% of companies, and its 5-year rate is even more remarkable at 21.00%, surpassing 90.48% of companies. However, the projected total revenue growth rate for the next 3 to 5 years is estimated at -2.39%, which, while better than 12.66% of companies, indicates potential challenges ahead. This mixed growth outlook suggests that while Natura &Co has demonstrated strong historical growth, it must navigate future market conditions carefully to sustain its upward trajectory.
Notable Shareholders
Among Natura &Co's shareholders, two notable investors stand out. Jim Simons (Trades, Portfolio) holds 670,237 shares, representing a 0.1% stake in the company, while Richard Pzena (Trades, Portfolio) owns 233,434 shares, equating to a 0.03% share. The involvement of these investors adds a layer of credibility and may influence other investors' perceptions of the stock's potential.
Competitive Landscape
When compared to its competitors, Natura &Co's market cap of $4.57 billion positions it between Mundial SA - Produtos De Consumo (BSP:MNDL3, Financial) with a market cap of $20.534 million and industry giants like Procter & Gamble Co (PG, Financial) and L'Oréal SA (XPAR:OR, Financial), with market caps of $371 billion and $258.62 billion, respectively. This comparison highlights Natura &Co's unique market position, operating within a competitive space that includes both smaller niche players and large multinational corporations.
Conclusion
In summary, Natura &Co Holding SA's recent stock performance has been a mix of short-term losses and medium-term gains, with the stock currently deemed fairly valued. The company's profitability metrics are strong, particularly in terms of ROE and ROA, and its historical growth rates are commendable. However, future revenue projections suggest potential headwinds. The presence of high-profile investors like Jim Simons (Trades, Portfolio) and Richard Pzena (Trades, Portfolio) may provide some reassurance to the market. When juxtaposed with its competitors, Natura &Co occupies a distinctive position, offering both challenges and opportunities for value investors. As the company continues to navigate the dynamic consumer packaged goods industry, its ability to maintain profitability and adapt to market changes will be critical to its ongoing success and appeal to investors.
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.
