The Fundamental Case for and Against Fossil Group, Inc. (FOSL)

Fossil Group, Inc. (NASDAQ:FOSL) is one of the more popular stocks investors are adding into their watchlist. Now trading with a market value of 886.32M, the company has a mix of catalysts and obstacles that spring from the nature of its operations. As the day-to-day narrative ebbs and flows for this company, it is more important than ever to step back and get a bird’s eye view of the fundamental reality under the surface of this story.

Fossil Group, Inc. (NASDAQ:FOSL) Fundamentals That Matter

It’s generally a good idea to start with the most fundamental piece of the picture: the balance sheet. The balance sheet health of any company plays a key role in its ability to meet its obligations and maintain the faith of its investment base. For FOSL, the company currently has 229.9 million of cash on the books, which is offset by 127.1 million in current liabilities. The trend over time is important to note. In this case, the company’s debt has been falling. The company also has 1.52 billion in total assets, balanced by 989.12 million in total liabilities, which should give you a sense of the viability of the company under any number of imagined business contexts.

Fossil Group, Inc. (FOSL) saw -8.14 million in free cash flow last quarter, representing a quarterly net change in cash of 104,000. Perhaps most importantly where cash movements are concerned, the company saw about -4.31 million in net operating cash flow.

Fossil Group, Inc. (NASDAQ:FOSL) Revenue Growth Potential

As far as key trends that demonstrate something of the future investment potential of this stock, we need to take a closer look at the top line, first and foremost. Last quarter, the company saw 569.16 million in total revenues. That represents a quarterly year/year change in revenues of -0.02 in sequential terms, the FOSL saw sales decline by -0.38.

But what about the bottom line? After all, that’s what really matters in the end. Fossil Group, Inc. (FOSL) is intriguing when broken down to its core data. The cost of selling goods last quarter was 281.47 million, yielding a gross basic income of 287.69 million. For shareholders, given the total diluted outstanding shares of 48.71 million, this means overall earnings per share of -0.99. Note, this compares with a consensus analyst forecast of 0.22 in earnings per share for its next fiscal quarterly report.

Is Fossil Group, Inc. (NASDAQ:FOSL) Valuation Attractive

Looking ahead at valuations, according to the consensus, the next fiscal year is forecast to bring about 0.57 in total earnings per share. If we consider a median price to earnings ratio on the stock, that corresponds with a stock price of 37.90. However, one should always remember: the trends are more important than the forecasts. This continues to be an interesting story, and we look forward to updating it again soon on Fossil Group, Inc..

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