Destination Stock Story

DXLG

- USA Stock

USD 4.13 0.09 2.23%

Macroaxis Story

As many rational traders are trying to avoid consumer cyclical space, it makes sense to digest Destination XL Group a little further and understand how it stands against Carters and other similar entities. We are going to discuss some of the competitive aspects of both Destination and Carters.

Published over six months ago

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What should I exit first Destination (NASDAQ:DXLG) or Carters?

By analyzing existing essential indicators between Destination and Carters, you can compare the effects of market volatilities on both companies' prices and check if they can diversify away market risk if combined in one of your portfolios. You can also utilize pair trading strategies for matching a long position in Carters with a short position in Destination. Check out our pair correlation module for more information.

Let's begin by analyzing the assets.

The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Destination has an asset utilization ratio of 410.57 percent. This indicates that the company is making $4.11 for each dollar of assets. An increasing asset utilization means that Destination XL Group is more efficient with each dollar of assets it utilizes for everyday operations.

What should I exit first Destination (NASDAQ:DXLG) or Carters?

How important is Destination's Liquidity

Destination financial leverage refers to using borrowed capital as a funding source to finance Destination XL Group ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Destination financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between Destination's total debt and its cash.

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.

Destination Net Cash Flow from Operations is projected to increase significantly based on the last few years of reporting. The past year's Net Cash Flow from Operations was at 75.54 Million

An Additional Perspective On Destination XL Group

Revenue is income that a firm generates from business activities such us rendering services or selling goods to customers. It is a crucial part of a business and an essential item when evaluating a company's financial statements. Revenues from a firm's primary business operations can be reported on the income statement as sales revenue, net sales, or simply sales, depending on the industry in which a given company operates.
Revenue is typically recorded when cash or cash equivalents are exchanged for services or goods and can include product or services discounts, promotions, as well as early payments on invoices or services rendered in advance.

Revenue Breakdown

Let me now analyze Destination revenue. Based on the latest financial disclosure, Destination XL Group reported 373.21 M of revenue. This is 94.77% lower than that of the Consumer Cyclical sector and significantly higher than that of the Apparel Retail industry. The revenue for all United States stocks is 96.04% higher than that of Destination. As for Carters we see revenue of 3.41 B, which is much higher than that of the Apparel Retail

CRI

3.4 B

DXLG	373.21 Million	9.86
Sector	0.0	0.0
CRI	3.41 Billion	90.14

Destination price dip is misleading

Latest value at risk indicator falls down to -4.13. Possible price growth? Destination XL Group shows above-average downside volatility for the selected time horizon. We advise investors to inspect Destination XL Group further and ensure that all market timing and asset allocation strategies are consistent with the estimation of Destination future alpha. 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 Final Takeaway

Although some other entities under the apparel retail industry are still a bit expensive, Destination may offer a potential longer-term growth to shareholders. While some shareholders may not share our view, we believe it may be a good time to increase your existing holdings in Destination as the risk-reward trade off is appealing enough to hold a position. 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

Vlad Skutelnik is a Macroaxis Contributor. Vlad covers stocks, funds, cryptocurrencies, and ETFs that are traded in North America, focusing primarily on fundamentals, valuation and market volatility. He has many years of experience in fintech, predictive investment analytics, and risk management. View Profile

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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