Yeti Holdings (NYSE: YETI), a market leader in outdoor coolers and drinkware, achieved steady growth over the years on the back of innovation and strength of the brand. Having raised its market cap to around $2.5 billion, after going public more than a year ago, Yeti remains unchallenged despite new players entering the recreational products market.
Currently, Yeti is fairly valued and has a strong potential for future growth – something most investors would find attractive. Already in the first quarter of fiscal 2020, the company is focused on meeting the growth targets and predicts double-digit sales and earnings growth for the full year, which is in line with the market’s expectations.
The bullish outlook suggests the stock might soon shift to the growth mode, creating value for shareholders. The recent pullback can be considered as a buying opportunity, given the relatively low price and the company’s strong fundamentals. Analysts overwhelmingly recommend buying Yeti, with a highly optimistic target price of about $42, which was revised up multiple times in recent weeks.
Stock Movement
After making a positive start to the year, the shares retreated and slipped to a three-month low this week, losing about 16% year-to-date. The value of the stock, which experienced high volatility since the IPO, more than doubled in 2019.
Catalysts
A closer look at last year’s performance shows growth was spurred by multiple factors, with the main catalysts being strong customer addition, product innovation and global expansion – plans are afoot to launch regional e-commerce platforms to drive online traffic, starting with Europe. Yeti is probably poised for a stronger growth this year, leveraging these positive elements combined with the company’s aggressive direct-to-customer initiatives.
Q4 Outcome
Yeti’s top-line outperformed Wall Street’s predictions consistently last year. In the final three months of the year, sales increased 23% annually, driving up adjusted earnings by a third to $0.48 per share amid improved omni-channel capabilities and solid margin growth. The fourth-quarter results also topped the Street view. Over the past decade, the rate of expansion has been phenomenal, which has left rivals trailing.