Victoria's Secret & Co. (VSXY) stock analysis

P/E above its 5-year median

Victoria's Secret's P/E of 24.8 is above its own 5-year median of 11.9.

P/E above the industry

Victoria's Secret's P/E of 24.8 is above the Apparel and Accessory Stores median of 19.1.

EV/EBITDA above its 5-year median

Victoria's Secret's EV/EBITDA of 11.8 is above its 5-year median of 5.6.

P/B above the industry

Victoria's Secret's price-to-book of 8.55 is above the Apparel and Accessory Stores median of 1.97.

Trading above fair value

The share price of $106.17 is above our fair value estimate of $54.37.

Margin of safety under 20%

The price is 95.3% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew 1.1% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -22.5% a year over the last three fiscal years.

Earnings acceleration

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

Growing faster than the industry

Revenue grew 10.3% over the last twelve months; the Apparel and Accessory Stores median is 4.7%.

Guidance raised

Victoria's Secret raised its fiscal year 2026 net sales outlook on Sep 3, 2026.

Gross margin improving

Gross margin was 39.6% over the last twelve months, against 36.3% a year earlier.

Return on equity over 15%

Return on equity was 45.3% over the last twelve months and averaged 60.3% over five years.

Return on capital over 10%

Return on invested capital was 28.7%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Victoria's Secret's return on equity of 45.3% is above the Apparel and Accessory Stores median of 16.8%.

Earnings over 5 years

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

Net margin above its 5-year average

Net margin was 5.5% over the last twelve months, against a 5-year average of 4.4%.

Net margin above the industry

Victoria's Secret's net margin of 5.5% is above the Apparel and Accessory Stores median of 2.3%.

High debt

Debt is 98.5% of shareholders' equity, above the 40% we consider low.

Debt rising against equity

Debt to equity rose from 10.9% five years ago to 98.5%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 77.7% of total debt.

Interest well covered

Operating income covers interest expense 8.4 times.

Short-term assets cover short-term debts

Current assets are 1.36 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 3.22; above 3 is the safe zone and below 1.8 the distress zone.

No dividend

Victoria's Secret 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.