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No. of Recommendations: 1
Share price of Michael Kors (KORS) rose substantially by 43.8% in the past 12 months. At $59.11, the stock is trading close to its 52-week high of $65.10 just achieved recently. There are 3 compelling reasons to support my view that a significant price upside remains despite the solid price appreciation in the past year.

1. From a relative valuation perspective, KORS shares appear to be priced reasonably based on the company's solid financial performance relative to its peers (see chart below). Consensus estimates on average predict KORS' revenue, EBITDA, and EPS to grow at 2-year CAGRs of 45.6%, 64.6%, and 65.9%, respectively. Those estimates are overwhelmingly above the averages of 8.0%, 6.3%, and 8.9%, respectively, for Coach (COH), which is KORS' closest comparable company. On the profit side, KORS' various profitability margins underperform those of Coach, but the difference is not significant. It is noted that KORS' capital return metrics are quite comparable to Coach's. In terms of liquidity, KORS' free cash flow margin is below Coach's benchmark, but the company's current and quick ratios are much higher than Coach's level, reflecting a highly liquid balance sheet..................


http://seekingalpha.com/article/1218711-michael-kors-the-sto...
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