What is our June take on Destination (NASDAQ:DXLG) valuation?

DXLG
 Stock
  

USD 5.88  0.11  1.91%   

As many millenniums are trying to avoid consumer cyclical space, it makes sense to digest Destination XL Group a little further and try to understand its current market patterns. We will analyze why Destination investors may still consider a stake in the business. Is the firm valuation sustainable? Here I will cover a perspective on valuation of Destination to give you a better outlook on taking a position in this stock.
Published over three months ago
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The company currently holds 155.6 M in liabilities with Debt to Equity (D/E) ratio of 2.67, implying Destination greatly relies on financing operations through barrowing.
We provide trade advice to complement the prevailing expert consensus on Destination XL Group. Our dynamic recommendation engine uses a multidimensional algorithm to analyze the company's potential to grow using all technical and fundamental data available at the time.
We determine the current worth of Destination XL Group using both absolute as well as relative valuation methodologies to arrive at its intrinsic value. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of Destination XL Group based exclusively on its fundamental and basic technical indicators. By analyzing Destination's financials, quarterly and monthly indicators, and related drivers such as dividends, operating cash flow, and various types of growth rates, we attempt to find the most accurate representation of Destination's intrinsic value. In some cases, mostly for established, large-cap companies, we also incorporate more traditional valuation methods such as dividend discount, discounted cash flow, or asset-based models. As compared to an absolute model, our relative valuation model uses a comparative analysis of Destination. We calculate exposure to Destination's market risk, different technical and fundamental indicators, relevant financial multiples and ratios, and then comparing them to Destination's related companies.

Destination XL Group Investment Alerts

Destination investment alerts and warnings help investors to get more proficient at understanding not only critical technical and fundamental signals but also the significant portfolio-centered indicators. These indicators include beta, alpha, and other risk-related measures that will help you in monitoring Destination XL Group performance across your portfolios.Please check all investment alerts for Destination

Destination Valuation Ratios as Compared to Competition

Our valuation model uses many indicators to compare Destination value to that of its competitors to determine the firm's financial worth. You can analyze the relationship between different fundamental ratios across Destination competition to find correlations between indicators driving the intrinsic value of Destination.

How does Destination utilize its cash?

To perform a cash flow analysis of Destination, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Destination is receiving and how much cash it distributes out in a given period. The Destination cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities.

An Additional Perspective On Destination XL Group

The latest indifference towards the small price fluctuations of Destination XL Group could raise concerns from shareholders as the firm is trading at a share price of 4.20 on 1,252,400 in volume. The company executives did not add any value to Destination investors in April. However, most investors can still diversify their portfolios with Destination XL Group to hedge their inherited risk against high-volatility market scenarios. The stock standard deviation of daily returns for 90 days investing horizon is currently 5.11. The very high volatility is mostly attributed to the latest market swings and not very good earnings reports from some of the Destination partners.
 2010 2014 2020 2022 (projected)
Interest Expense1.05 M3.3 M4.35 M3.41 M
Gross Profit176.36 M204.2 M249.82 M231.49 M

Margins Breakdown

Destination profit margins show the degree to which it makes money. Margin indicators are used not only by investors but also by creditors or Destination itself as indicators of financial health and management effectiveness. Please look more closely at the different varieties of Destination profit margins.
0.0432
Profit Margin
0.1
EBITDA Margin
Operating Margin(2.51)
EBITDA Margin0.1
Gross Margin0.5
Profit Margin0.0432


Destination PPandE Turnover is rather stable at the moment. Also, Destination Net Income Per Employee is rather stable at the moment.

Are Destination technical ratios showing a recoup?

Latest coefficient of variation is at 3995.89. Destination XL Group exhibits above-average semi-deviation for your current time horizon. We encourage investors to investigate Destination XL Group individually to make sure intended market timing strategies and available technical indicagtors are consistent with their estimates about Destination future systematic risk. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Destination's stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact Destination's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

Destination Implied Volatility

Destination's implied volatility exposes the market's sentiment of Destination XL Group stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if Destination's implied volatility is high, the market thinks the stock has potential for high price swings in either direction. On the other hand, the low implied volatility suggests that Destination stock will not fluctuate a lot when Destination's options are near their expiration.

Our Bottom Line On Destination XL Group

Although few other entities within the apparel retail industry are still a little expensive, even after the recent corrections, Destination may offer a potential longer-term growth to shareholders. With a somewhat neutral outlook on your 90 days horizon, it may be better to hold off any trading activity and neither buy new shares of Destination nor sell your existing holdings in the Stock. It seems the expected volatility has not yet been fully factored into the current price. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Destination.

Editorial Staff

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Vlad Skutelnik do not own shares of Destination XL Group. Please refer to our Terms of Use for any information regarding our disclosure principles.

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