Which is more compelling pick right now? – Iconix Brand Group, Inc. (ICON), GNC Holdings, Inc. (GNC)

The shares of Iconix Brand Group, Inc. have decreased by more than -44.96% this year alone. The shares recently went up by 5.09% or $0.03 and now trades at $0.71. The shares of GNC Holdings, Inc. (NYSE:GNC), has slumped by -4.07% year to date as of 05/15/2018. The shares currently trade at $3.54 and have been able to report a change of 5.04% over the past one week.

The stock of Iconix Brand Group, Inc. and GNC Holdings, Inc. were two of the most active stocks on Tueday. Investors seem to be very interested in what happens to the stocks of these two companies but do investors favor one over the other? We will analyze the growth, profitability, risk, valuation, and insider trends of both companies and see which one investors prefer.

Profitability and Returns

Growth alone cannot be used to see if the company will be valuable. Shareholders will be the losers if a company invest in ventures that aren’t profitable enough to support upbeat growth. In order for us to accurately measure profitability and return, we will be using the EBITDA margin and Return on Investment (ROI), which balances the difference in capital structure. The ROI of ICON is -62.70% while that of GNC is -15.80%. These figures suggest that GNC ventures generate a higher ROI than that of ICON.

Cash Flow

The value of a stock is ultimately determined by the amount of cash flow that the investors have available. Over the last 12 months, ICON’s free cash flow per share is a positive 0, while that of GNC is positive 0.89.

Liquidity and Financial Risk

The ability of a company to meet up with its short-term obligations and be able to clear its longer-term debts is measured using Liquidity and leverage ratios. The current ratio for ICON is 2.00 and that of GNC is 1.50. This implies that it is easier for ICON to cover its immediate obligations over the next 12 months than GNC.


ICON currently trades at a forward P/E of 1.77, and a P/S of 0.22 while GNC trades at a forward P/E of 5.53, and a P/S of 0.12. This means that looking at the earnings, book values and sales basis, ICON is the cheaper one. It is very obvious that earnings are the most important factors to investors, thus analysts are most likely to place their bet on the P/E.

Analyst Price Targets and Opinions

The mistake some people make is that they think a cheap stock has more value to it. In order to know the value of a stock, there is need to compare its current price to its likely trading price in the future. The price of ICON is currently at a -52.67% to its one-year price target of 1.50. Looking at its rival pricing, GNC is at a 4.73% relative to its price target of 3.38.

When looking at the investment recommendation on say a scale of 1 to 5 (1 being a strong buy, 3 a hold, and 5 a sell), ICON is given a 3.00 while 3.60 placed for GNC. This means that analysts are more bullish on the outlook for GNC stocks.

Insider Activity and Investor Sentiment

Short interest or otherwise called the percentage of a stock’s tradable shares currently being shorted is another data that investors use to get a handle on sentiment. The short ratio for ICON is 5.70 while that of GNC is just 10.64. This means that analysts are more bullish on the forecast for ICON stock.


The stock of Iconix Brand Group, Inc. defeats that of GNC Holdings, Inc. when the two are compared, with ICON taking 6 out of the total factors that were been considered. ICON happens to be more profitable, generates a higher ROI, has higher cash flow per share, higher liquidity and has a lower financial risk. When looking at the stock valuation, ICON is the cheaper one on an earnings, book value and sales basis. Finally, the sentiment signal for ICON is better on when it is viewed on short interest.

Previous ArticleNext Article

Related Post

Comparing Top Moving Stocks DexCom, Inc. (DXCM), S... The shares of DexCom, Inc. have increased by more than 25.74% this year alone. The shares recently went down by -3.39% or -$2.53 and now trades at $72...
Critical Comparison: Baxter International Inc. (BA... Baxter International Inc. (NYSE:BAX) shares are up more than 45.04% this year and recently increased 0.27% or $0.17 to settle at $64.31. Akers Bioscie...
Old Republic International Corporation (ORI) vs. T... Old Republic International Corporation (NYSE:ORI) shares are up more than 2.75% this year and recently decreased -1.92% or -$0.41 to settle at $20.91....
Critical Comparison: The Blackstone Group L.P. (BX... The Blackstone Group L.P. (NYSE:BX) shares are up more than 17.35% this year and recently increased 0.60% or $0.19 to settle at $31.72. Voya Financial...
Taking Tally Of Skechers U.S.A., Inc. (SKX), MuleS... The shares of Skechers U.S.A., Inc. have decreased by more than -23.15% this year alone. The shares recently went down by -0.21% or -$0.06 and now tra...