Coty Inc. (COTY) stock analysis

P/E against its history

Not enough price and earnings history to compare.

P/E against the industry

Needs positive earnings and enough profitable companies in the industry.

EV/EBITDA above its 5-year median

Coty's EV/EBITDA of 16.6 is above its 5-year median of 12.6.

P/B below the industry

Coty's price-to-book of 1.15 is below the Soap, Detergents, and Cleaning Preparations; Perfumes, Cosmetics, and Other Toilet Preparations median of 4.86.

Trading above fair value

The share price of $4.06 is above our fair value estimate of $3.70.

Margin of safety under 20%

The price is 9.7% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew 1.5% a year over the last three fiscal years, short of the 10% we look for.

EPS growth over 3 years

Needs positive EPS three years ago and today.

Earnings acceleration

Needs positive net income now, a year ago and five years ago.

Growing slower than the industry

Revenue grew -0.2% over the last twelve months; the Soap, Detergents, and Cleaning Preparations; Perfumes, Cosmetics, and Other Toilet Preparations median is 5.9%.

Guidance lowered

Coty lowered its FY26 adjusted EPS, excluding the equity swap outlook on May 5, 2026.

Gross margin slipping

Gross margin was 62.6% over the last twelve months, against 64.6% a year earlier.

Return on equity under 15%

Return on equity was -16.7% over the last twelve months and averaged -0.6% over five years; we look for 15% on both.

Return on capital under 10%

Return on invested capital was -1.2%, below the 10% that usually covers the cost of capital.

Return on equity below the industry

Coty's return on equity of -16.7% is below the Soap, Detergents, and Cleaning Preparations; Perfumes, Cosmetics, and Other Toilet Preparations median of -1.2%.

Earnings over 5 years

Needs positive net income five years ago and in the latest year.

Net margin below its 5-year average

Net margin was -9.7% over the last twelve months, against a 5-year average of -0.2%.

Net margin below the industry

Coty's net margin of -9.7% is below the Soap, Detergents, and Cleaning Preparations; Perfumes, Cosmetics, and Other Toilet Preparations median of 0.2%.

High debt

Debt is 88.5% of shareholders' equity, above the 40% we consider low.

Debt falling against equity

Debt to equity fell from 190% five years ago to 88.5%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 21.9% of total debt.

Interest not well covered

Operating income covers interest expense -0.6 times; we look for at least 5.

Short-term assets don't cover short-term debts

Current assets are 0.75 times current liabilities.

Elevated bankruptcy risk

The Altman Z-score is -0.02; above 3 is the safe zone and below 1.8 the distress zone.

No dividend

Coty has not paid a dividend in the last twelve months.

Yield against Treasuries

No dividend.

Yield against the market

No dividend.

Dividend stability

No dividend.

Earnings cover

No dividend.

Cash-flow cover

No dividend.