Should you buy Samsonite stock? (August 2024)
Summary
TLDRSamsonite, a leading luggage brand listed on the Hong Kong Stock Exchange, boasts a market valuation of $3.8 billion and an Enterprise Value of $4.8 billion. With a history of 11% average annual revenue growth and improving net income margins, the company's stock is valued reasonably at under 10 times free cash flow. Samsonite owns three core brands and has a diversified revenue base across Asia, North America, and Europe. The potential for a secondary listing in the US could increase liquidity and valuation. Despite risks such as travel growth slowdown and debt, the company appears to be a stable investment with bullish prospects.
Takeaways
- 🧳 Samsonite is a leading global luggage brand with a market valuation of $3.8 billion, accounting for cash and debt.
- 📈 The company has an Enterprise Value of 4.8 billion, with revenue over the last 12 months at 3.7 billion and net income of 426 million.
- 💹 Samsonite's stock is valued at under nine times earnings and under 10 times free cash flow, suggesting a reasonable valuation.
- 📊 Over the past decade, Samsonite has shown an average annual revenue growth of 11%, including through the pandemic disruption.
- 📈 The company's net income margins and free cash flow margins have steadily improved, with net income margins nearing 12%.
- 🏢 Samsonite was founded in Denver, USA, and has joint headquarters in Massachusetts, owning three core brands: Samsonite, Tumi, and American Tourister.
- 🌏 Revenue is diversified across regions, with Asia at 38%, North America at 34%, and Europe at 21%, and across wholesale and direct-to-consumer segments.
- 🚀 The travel industry's rebound and China's potential for growth offer opportunities for Samsonite, despite not being back to pre-pandemic levels.
- 📊 Management is considering a secondary listing for Samsonite, which could increase liquidity and attract mutual funds and institutional buyers, potentially boosting valuation.
- 💰 Assuming a 5% earnings growth and a PE multiple expansion to 15, the stock could see a 76% upside, based on the current valuation of $3.8 billion.
- ⚠️ Risks include potential slowing travel growth, existing debt, and uncertainty regarding the success and impact of a secondary listing.
Q & A
What is the current market valuation of Samsonite according to the script?
-The current market valuation of Samsonite is $3.8 billion USD.
What is Samsonite's Enterprise Value as mentioned in the script?
-Samsonite's Enterprise Value is $4.8 billion.
How much revenue did Samsonite generate over the last 12 months?
-Samsonite generated $3.7 billion in revenue over the last 12 months.
What is Samsonite's net income for the last 12 months?
-Samsonite's net income for the last 12 months is $426 million.
What are Samsonite's adjusted EBITDA and free cash flow figures?
-Samsonite's adjusted EBITDA is $714 million, and its free cash flow is $5 million.
How does the script describe Samsonite's valuation in terms of earnings and free cash flow?
-The script describes Samsonite's valuation as being under nine times earnings and under 10 times free cash flow.
What has been Samsonite's average annual revenue growth over the past 10 years?
-Samsonite's average annual revenue growth over the past 10 years has been around 11%.
What regions contribute to Samsonite's sales, and what are their respective percentages?
-Samsonite's sales are diversified across four regions: Asia (38%), North America (34%), Europe (21%), and the rest is unspecified.
What potential future development does the script mention regarding Samsonite's stock listing?
-The script mentions that Samsonite is considering pursuing a secondary listing, possibly in Europe or the US, which could increase liquidity and potentially boost the company's valuation.
What is the potential upside in Samsonite's stock if certain conditions are met?
-If Samsonite's earnings grow by another 5% next year, and the stock is listed on a US exchange with a PE multiple expanding from 8.9 to 15, the valuation could reach about $6.7 billion, equating to a 76% upside in the stock.
Outlines
🧳 Samsonite: A Leading Luggage Brand with Growth Potential
Samsonite, a renowned luggage brand listed on the Hong Kong Stock Exchange, has a market valuation of $3.8 billion, with an Enterprise Value of 4.8 billion. The company has shown resilience with an average annual revenue growth of 11% over the past decade, even amidst pandemic disruptions. With net income margins nearing 12% and a diversified revenue stream across Asia, North America, and Europe, Samsonite appears to be a stable and globally recognized business. The company's core brands include Samsonite, Tumi, and American Tourister, catering to a broad consumer base. Despite the travel industry's rebound, opportunities for growth remain, especially in Asia where China's travel sector has yet to return to pre-pandemic levels. Samsonite's management has indicated a pursuit of a secondary listing, which could enhance the company's valuation by increasing liquidity and attracting institutional investors. Assuming a 5% earnings growth and a potential listing on a US stock exchange, the company's valuation could rise significantly, offering investors substantial upside.
Mindmap
Keywords
💡Global Travel Stock
💡Market Valuation
💡Enterprise Value
💡Revenue
💡Net Income
💡Adjusted EBITDA
💡Free Cash Flow
💡Valuation Multiples
💡Growth Prospects
💡Secondary Listing
💡Bullish Rating
Highlights
Samsonite is a leading luggage brand listed on the Hong Kong Stock Exchange.
The company's market valuation is $3.8 billion, with an Enterprise Value of $4.8 billion.
Samsonite's revenue over the last 12 months is $3.7 billion, with a net income of $426 million.
Adjusted EBITDA stands at $714 million, and free cash flow is $5 million.
Samsonite stock is valued at under nine times earnings and under ten times free cash flow.
The company has averaged annual revenue growth of 11% over the past 10 years.
Net income margins are now approaching 12%, showing steady improvement over time.
Despite being listed in Hong Kong, Samsonite was founded in Denver, USA, and has a joint headquarters in Massachusetts.
Samsonite owns three core brands: Samsonite, Tumi, and American Tourister.
Revenue is diversified across four regions: Asia (38%), North America (34%), and Europe (21%).
The company's sales are spread across different segments: wholesale and direct-to-consumer.
China's travel industry hasn't yet returned to pre-pandemic levels, offering potential growth opportunities.
Management is pursuing a secondary listing for Samsonite shares, which could unlock additional value.
A potential US Stock Exchange listing could increase liquidity and attract mutual funds and institutional buyers.
With a 5% earnings growth projection and PE multiple expansion to 15, the valuation could reach $6.7 billion, equating to 76% upside.
Transcripts
This Global Travel stock is one to watch
Samsonite is a leading luggage brand
which is currently listed on the Hong
Kong Stock Exchange at the latest price
the company's got a market valuation of
$3.8 billion US account for cash and
debt on the balance sheet and the
Enterprise Value is 4.8 billion Revenue
over the last 12 months comes to 3.7
billion with 426 million of net income
714 million of adjusted ebit D and 5
million of free cash flow so Samsonite
stock is valued at under nine times
earnings and under 10 times free cash
flow that valuation looks reasonable
when you consider the company's history
over the past 10 years Samsonite has
averaged annual revenue growth in the
region of 11% despite a large disruption
from the pandemic meanwhile net income
margins and free cash flow margins have
steadily improved over time with net
income margins now approaching 12%
despite being listed on the h Kong Stock
Exchange Samsonite was in fact founded
in Denver USA and has a joint
headquarters in Massachusetts today the
company owns Three core Brands Samsonite
Tumi and American tourista with Revenue
Diversified across four regions Asia
makes up 38% of sales with North America
at 34% and Europe at 21% sales are also
spread across different segments
wholesale and direct to Consumer overall
this looks like a state stable and
diversified Global business with
reasonable growth prospects particularly
in Asia while the travel industry has
experienced a huge rebound China still
isn't back to its pre pandemic level
which should offer some opportunity
going forward but there's one more
reason to consider Samsonite stock in
their latest trading update management
said the company would be pursuing
what's known as a secondary listing for
the shares the Hong Kong stock market
has been left for dead in recent years
so a secondary listing for Samsonite in
Europe or the us could help unlock the
company's value a listing in New York
for example would increase liquidity and
open the stock up to mutual funds and
institutional buyers that in turn could
boost the company's valuation so let's
assume the company manages to grow
earnings another 5% next year and gets
listed on a US Stock Exchange and let's
assume the PE multiple expands from 8.9
today to 15 that would put the valuation
at a about $6.7 billion which equates to
about 76% upside in the stock that seems
achievable and management clearly have
shareholders in mind but there are some
risks to consider growth in travel may
start to slow down from here after the
huge recovery we've had Samsonite does
have some debt and there's also the
possibility that a secondary listing
never happens and if it does happen we
don't know for sure that it will unlock
value but even without a secondary
listing this looks like a decent enough
business to own as a result I give this
stock a bullish rating but these are my
personal opinions not Financial advice
and I do own shares in Samsonite for
more investing videos make sure to visit
my website at 3minit breakdown. comom
thank you for watching
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