Tapestry, Inc. (TPR) stock analysis

P/E above its 5-year median

Tapestry's P/E of 17.2 is above its own 5-year median of 13.1.

P/E below the industry

Tapestry's P/E of 17.2 is below the Consumer discretionary median of 19.6.

EV/EBITDA above its 5-year median

Tapestry's EV/EBITDA of 13.0 is above its 5-year median of 8.3.

P/B above the industry

Tapestry's price-to-book of 77.29 is above the Consumer discretionary median of 2.44.

Trading above fair value

The share price of $133.34 is above our fair value estimate of $102.29.

Margin of safety under 20%

The price is 30.4% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew 6.3% a year over the last three fiscal years, short of the 10% we look for.

EPS growing 10%+ a year

Diluted EPS grew 23.3% a year over the last three fiscal years.

Earnings growth accelerating

Net income grew 494% over the last twelve months, against a 5-year average of 12.9% a year.

Growing faster than the industry

Revenue grew 13.7% over the last twelve months; the Consumer discretionary median is 7.2%.

Guidance raised

Tapestry raised its Fiscal 2026 Revenue outlook on May 7, 2026.

Gross margin improving

Gross margin was 78.3% over the last twelve months, against 75.7% a year earlier.

Return on equity over 15%

Return on equity was 434% over the last twelve months and averaged 62.1% over five years.

Return on capital over 10%

Return on invested capital was 74.3%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Tapestry's return on equity of 434% is above the Consumer discretionary median of 5.6%.

Earnings grew over 5 years

Net income grew 12.9% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 19.7% over the last twelve months, against a 5-year average of 12.2%.

Net margin above the industry

Tapestry's net margin of 19.7% is above the Consumer discretionary median of 5.6%.

High debt

Debt is 755% of shareholders' equity, above the 40% we consider low.

Debt rising against equity

Debt to equity rose from 49.1% five years ago to 755%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 79.4% of total debt.

Interest well covered

Operating income covers interest expense 17.0 times.

Short-term assets cover short-term debts

Current assets are 1.24 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 4.13; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Tapestry paid dividends worth 1.2% of the share price over the last twelve months.

Yield below Treasuries

The 1.2% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Tapestry yields 1.2%.

Dividend was cut

The dividend per share fell by more than 10% at least once in the last 10 fiscal years.

Covered by earnings

Dividends take 20.8% of net income.

Covered by free cash flow

Dividends take 17.8% of free cash flow.