Value
7.4/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 7.9 |
| P/S | 9.9 |
| EV/EBITDA | 2.2 |
| Fwd P/E | 9.6 |
| PEG | 10.0 |
| Analyst target | 4.0 |
- ▸Forward P/E: 7.9x
- ▸PEG: 0.26
- ▸Attractively valued
CPRI · Why this verdict
Why Capri Holdings (CPRI) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictHOLD
Overall score4.9/10
ConfidenceHIGH
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
A luxury goods holding company screens attractively valued at a forward P/E of 8.1x with a PEG of 0.27, but three consecutive earnings misses, revenue declining at -4%, heavy concentration in a single brand representing 83% of sales, and a reward-to-risk ratio that does not clear the minimum bar make this a watch rather than a buy.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
A single brand represents 83% of total company revenue, creating a structural concentration risk where any deterioration in that brand's consumer appeal, market positioning, or competitive dynamics directly translates to group-level earnings pressure with no diversification buffer. Bear case | Revenue from brands other than the primary label grows to represent more than 30% of group sales within 24 months, reducing single-brand dependence. | →Stable |
| CounterA dominant brand position can reflect focused capital allocation and operational scale efficiencies; management may deploy resources more effectively when concentrated around a core brand than when spreading across multiple under-scale labels competing for investment. | ||
With 9.9% upside to the analyst target and 15.0% downside risk, the reward-to-risk ratio stands at 1.41—below the 1.5-to-1 minimum—meaning the current price does not yet offer sufficient compensation for the execution risk in a business with declining revenue and significant leverage at 16.9 times equity. Price targets | Reward-to-risk improves above 1.5 within 12 months, either via a price decline that reduces the gap to the stop or via analyst target revisions upward that widen the upside ceiling. | ↓Deteriorating |
| CounterAt 1.41-to-1, the reward/risk is close to the minimum bar; a modest improvement in earnings trajectory could trigger multiple expansion and analyst upgrades that push the target above 23.15, crossing the threshold organically without requiring a price pullback. | ||
A forward P/E of 8.1x and a PEG ratio of 0.27 place the stock in attractively valued territory, with sell-side analysts seeing 22% upside from current levels; if earnings stabilize, the discount to intrinsic value could provide a floor and attract value-oriented buyers. Valuation breakdown | Price recovers toward the analyst consensus target of 23.15 within 12 months as the valuation discount attracts buyers and earnings stabilize. | ↓Deteriorating |
| CounterA cheap multiple on a business with three consecutive earnings misses and declining revenue can be a value trap rather than a floor; if EPS estimates continue falling, the 8.1x forward multiple expands in practice and the apparent cheapness disappears without any price movement. | ||
Three consecutive earnings misses, most recently by -129.7% against expectations, alongside revenue declining at -4%, signal that the business is shrinking and systematically underdelivering against analyst models—not an isolated quarter of volatility. Earnings | Revenue growth turns positive and EPS surprise exceeds 0% for 2 consecutive quarters, confirming the execution decline has stabilized. | ↑Improving |
| CounterThe oldest quarter in the four-quarter window produced a 271.9% upside surprise, demonstrating that the business can substantially exceed estimates when conditions align; if restructuring actions are taking hold, the miss streak may end more abruptly than the recent trend implies. | ||
A single brand represents 83% of total company revenue, creating a structural concentration risk where any deterioration in that brand's consumer appeal, market positioning, or competitive dynamics directly translates to group-level earnings pressure with no diversification buffer.
→StableBear case
- Expectation
- Revenue from brands other than the primary label grows to represent more than 30% of group sales within 24 months, reducing single-brand dependence.
CounterA dominant brand position can reflect focused capital allocation and operational scale efficiencies; management may deploy resources more effectively when concentrated around a core brand than when spreading across multiple under-scale labels competing for investment.
With 9.9% upside to the analyst target and 15.0% downside risk, the reward-to-risk ratio stands at 1.41—below the 1.5-to-1 minimum—meaning the current price does not yet offer sufficient compensation for the execution risk in a business with declining revenue and significant leverage at 16.9 times equity.
↓DeterioratingPrice targets
- Expectation
- Reward-to-risk improves above 1.5 within 12 months, either via a price decline that reduces the gap to the stop or via analyst target revisions upward that widen the upside ceiling.
CounterAt 1.41-to-1, the reward/risk is close to the minimum bar; a modest improvement in earnings trajectory could trigger multiple expansion and analyst upgrades that push the target above 23.15, crossing the threshold organically without requiring a price pullback.
A forward P/E of 8.1x and a PEG ratio of 0.27 place the stock in attractively valued territory, with sell-side analysts seeing 22% upside from current levels; if earnings stabilize, the discount to intrinsic value could provide a floor and attract value-oriented buyers.
↓DeterioratingValuation breakdown
- Expectation
- Price recovers toward the analyst consensus target of 23.15 within 12 months as the valuation discount attracts buyers and earnings stabilize.
CounterA cheap multiple on a business with three consecutive earnings misses and declining revenue can be a value trap rather than a floor; if EPS estimates continue falling, the 8.1x forward multiple expands in practice and the apparent cheapness disappears without any price movement.
Three consecutive earnings misses, most recently by -129.7% against expectations, alongside revenue declining at -4%, signal that the business is shrinking and systematically underdelivering against analyst models—not an isolated quarter of volatility.
↑ImprovingEarnings
- Expectation
- Revenue growth turns positive and EPS surprise exceeds 0% for 2 consecutive quarters, confirming the execution decline has stabilized.
CounterThe oldest quarter in the four-quarter window produced a 271.9% upside surprise, demonstrating that the business can substantially exceed estimates when conditions align; if restructuring actions are taking hold, the miss streak may end more abruptly than the recent trend implies.
Per-dimension breakdown
Quality
4.8/10data confidence 100%| Component | Sub-score |
|---|---|
| ROA | 0.9 |
| Gross margin | 8.7 |
| Op margin | 1.1 |
| Net margin | 3.1 |
| Current ratio | 4.5 |
| FCF quality | 10.0 |
| Moat | 4.8 |
| Piotroski F | 5.6 |
- ▸Excellent cash conversion: 149% FCF/NI
- ▸No competitive moat
Growth
1.1/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 1.1 |
- ▸Declining revenue: -6%
Momentum
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.0 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 7.5 |
| Volume | 4.8 |
- ▸Overbought (RSI 79)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-MA but MA slope flat/negative + RSI 79 (late-cycle distribution risk)
Sentiment
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.5 |
| Analyst rating | 7.3 |
| Price target | 6.3 |
Insider
4.8/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 4.5 |
| notable moves | 5.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
3.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.8 |
| quality rank | 6.7 |
| growth rank | 0.0 |
Technical
2.5/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 0.2 |
| 52w position | 5.0 |
| gap | 5.0 |
Risk (lower is worse)
4.7/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 2.9 |
| days to cover | 7.9 |
| volatility | 0.9 |
| put call | 8.1 |
| implied vol | 4.0 |
| max pain risk | 7.0 |
| beta | 5.8 |
| debt equity | 0.0 |
| news risk | 6.0 |
- ▸Concentration risks: 1 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
7.6/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| news activity | 8.0 |
- ▸Perfect beat streak: 4Q
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position. | News modifier +2 (SELL_IF_HOLDING → HOLD_IF_HOLDING).
Engine technical detail
verdict_path:
L4:PATH_F_SELL|L3:NEWS_MOD=+2Passed (7)
- MOMENTUM:7.3>=5.5
- INSIDER:OK
- NEWS_BOOST:ANALYST:0.60
- NEWS_BOOST:ANALYST_CLUSTER(4)
- EARNINGS_PROXIMITY:89d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.1=NEGATIVE
Warning (2)
- DEATH_CROSS:momentum=7.3>=5.0 recovering
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-0.12
Upside
-1.8%
Downside
15.0%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 79
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $2.1B<$5B
Investment implication
The F-path SELL output reflects an overall score of 1.4 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Catalyst at 7.6) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-0.1=NEGATIVE) reinforce the read. Current asymmetry R:R is -0.12 — supplementary context, not the trigger for this path.
The strongest dimensions are Catalyst at 7.6, Value at 7.4, and Momentum at 7.3; the weakest are Growth at 1.1, Technical at 2.5, and Peer rank at 3.1. The V9 engine flagged 1 failed gate with 2 warnings, producing an asymmetric reward-to-risk of -0.12 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Attractive Valuation Potential Floor
Trip ifPrice rises above the analyst consensus target of 23.15 while forward EPS estimates decline by more than 15%, expanding the effective multiple and eroding the valuation floor.
- P2Single Brand Concentration Risk
Trip ifPrimary brand revenue concentration falls below 70% of total group revenue for 2 consecutive annual reporting periods.
- P3Three Consecutive Earnings Misses
Trip ifRevenue growth turns positive (above 0% YoY) and EPS surprise exceeds 0% for 2 consecutive quarters.
- P4Reward Risk Below Minimum Bar
Trip ifReward-to-risk ratio rises above 1.5 as upside to analyst target exceeds 15% from current price of 21.06.