Simple Concepts Research Group

Here’s Why Investors Are Reconsidering Qurate Retail (NASDAQ: QRTEA)

by | Dec 20, 2021 | 52 Week Lows, Stock Picks

Qurate Retail (QRTEA) Company Overview & Stock Price Forecast

This article provides a brief analysis and stock rating for Qurate Retail (QRTEA) including an updated stock price target. Additional data on the company’s earnings yield, price/earnings ratio, return on invested capital and YTD performance are discussed as well.

Qurate Retail Fundamentals

QRTEA Stock Rating

Stock Price Target: $13.27

In the section below, we discuss the earnings yield, P/E, return on invested capital and YTD performance for Qurate Retail in comparison to the Online Retail industry and the S&P 500.

Qurate REtail is a Small Cap company with a Market Cap of $3.16B.

How are investors using Qurate Retail earnings yield to assess the company?

Qurate Retail (QRTEA)_ Earnings Yield in Comparison to the Online Retail Industry, S&P 500 and 10 Year Treasury Rate

The earnings yield is used to show the percentage of a company’s earnings per share. Investors typically use earnings yield to determine which assets are underpriced or overpriced relative to other variables, like sector, industry or bond yields. Simply put, the earnings yield of a company can be used to assess how expensive a company is in relation to the earnings that are generated. When valuing companies, the SIS Research Group does not utilize the inverse P/E ratio to calculate the earnings yield. Instead, we use an adjusted earning yield calculation to capture variation amongst companies (i.e. debt and tax rates).

The current earnings yield for Qurate Retail is 17.36%, in comparison to 3.44% for the S&P 500 and 1.41% for the 10-year treasury bond. The median earnings yield for the Online Retail industry is 2.30%.

What does Qurate Retail Price-to-Earnings Ratio (P/E) tell investors about the company?

Qurate Retail (QRTEA)_ Price-to-Earnings, Price-to-Sales and Price-to-Book Value in Comparison to the Online Retail Industry and the S&P 500

The price-to-earnings ratio (P/E) is a relatively popular metric used by investors and analysts for valuing a company’s stock. The P/E ratio can be used to show how a stock’s valuation compares to other companies and the total market. Investors use the P/E ratio to determine what the market is willing to pay today based on a company’s past or future earnings. A high P/E ratio could mean that a stock’s price is too high relative to earnings, which could be a signal that a stock is currently overvalued. In turn, a low P/E ratio could indicate that a company’s current stock price is low relative to earnings. 

Qurate Retail is currently trading at a P/E of 2.63. The P/E for the Online Retail industry is 54.87 and the P/E for the S&P 500 is 29.68.

What is the current Price-to-Sales Ratio (P/S) for Qurate Retail?

The Price-to-Sales Ratio (P/S) looks at a company’s market cap and revenue to determine valuation. The P/S ratio is calculated by taking a company’s market cap and dividing by the total sales or revenue. The P/S ratio gives an idea of how much the market values every dollar of a company’s sales and can be effective in valuing unprofitable growth stocks or companies that are currently undergoing special situations or challenges. A lower the P/S ratio can be an indicator of good value.

Qurate Retail is currently trading at a P/S of 0.22. The P/S for the Online Retail industry is 4.52 and the P/S for the S&P 500 is 3.22.

How does Qurate Retail Price-to-BookRatio (P/B) compare to the Online Retail industry?

Price-to-book value (P/B) is the ratio of the market value of a company’s shares divided by its book value of equity (the value of it’s assets on the books). The book value is the difference between the book value of assets and liabilities. Typically, investors use the P/B ratio to assess if a stock is valued properly (a value of one means that the stock price is trading in line with the book value of the company). A company with a high P/B ratio could mean the stock price is overvalued as well as the converse.

Qurate Retail P/B ratio is 0.86. The P/B for the Online Retail industry is 18.62 and the P/B for the S&P 500 is 4.86.

How attractive is Qurate Retail Return on Invested Capital (ROIC) to investors?

Qurate Retail (QRTEA)_ Return on Invested Capital in Comparison to the Online Retail Industry and the S&P 500

Investors use the return on invested capital (ROIC) to assess how efficient a company is at turning capital into profits. The ROIC is the amount of money a company makes on it’s investments that is above the average cost of debt and equity.

Investors can use the ROIC to provide context for metrics like the (P/E) ratio. For instance, when used in isolation a low P/E ratio could suggest a company is oversold but the decline could be because a company is no longer generating value for shareholders. Conversely, companies that consistently generate high rates of ROIC can plausibly trade at a premium compared to other stocks, even if their P/E ratios are high.

Qurate Retail ROIC is currently 12% in comparison to 11.04% for the Online Retail industry and 8.60% for the S&P 500.

How has QRTEA stock performed over the past year? What is the current analyst price target?

Qurate Retail (QRTEA )_ Price Target & 52-Week Price Range (1)

Over the past 52 weeks, Qurate Retail has traded between the range of $6.91 and $12.78.

The current Analyst Price Target for QRTEA stock is $13.27.

What is Qurate Retail YTD Performance in comparison to its industry and the total market?

The year-to-date (YTD) performance is the amount of profit/loss realized by a stock since the first trading day of the current calendar year. 

The YTD performance for Qurate Retail is -20.04%. The Online Retail industry has a YTD performance of 6.24% in comparison to the YTD S&P 500 performance of 23%.

Qurate Retail (QRTEA)_ YTD Performance in Comparison to the Online Retail Industry and the S&P 500

Recent Financial Results (Q3, 2021)

  • Revenue decreased 7% to $3.1B
  • eCommerce revenue decreased 6% to $2B or 63% of total revenue
  • QVC International revenue decreased 3%
  • During Q3 2021 company repurchased 10.9M QRTEA shares at an average price per share of $11.02 and total cost of $120M
  • Amended QVC, Inc. revolver in October 2021, extending maturity to 2026, reducing interest rate and increasing borrowing capacity to $3.25B

Stock Price Target: $13.27

Company Overview

QRTEA Stock Rating

Qurate Retail engages in the video and online commerce industries in North America, Europe, and Asia. The company markets and sells various consumer products primarily through live televised shopping programs, Internet, and mobile applications to approximately 218 million households.

Qurate also operates as an online retailer offering women’s, children’s, and men’s apparel; and other products, such as home, accessories, and beauty products through its app, mobile, and desktop applications. The company was formerly known as Liberty Interactive Corporation and changed its name to Qurate Retail in April 2018. Qurate was founded in 1991 and is headquartered in Englewood, Colorado. The current CEO is Greg Maffei.

Be sure to add Qurate Retail (QRTEA) to your Watch List and if you haven’t done so already, check in on the performance of our Current Portfolio. Keep it simple and always do your due diligence.

This material is provided for informational purposes only and is not financial advice. The information contained herein should not solely be used for the formation of an investment decision, whether you are a long term or short term investor.