Taking Another Look at Movado Stock As Earnings Loom

Movado Group reports earnings on March 25

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Movado Group, Inc. (NYSE:MOV) is an American watchmaker and is best known for its Museum Watch. The company designs, sources, and globally distributes watches, jewelry and other accessories for various brands including Movado, MVMT, Olivia Burton, Ebel, Concord, Coach, Tommy Hilfiger, Hugo Boss, Lacoste, and Scuderia Ferrari. MOV also operates Movado company stores in the United States and Canada.

Earlier in the year, Movado reinstated its dividend. The company declared a cash dividend of $0.10 per share on Jan. 11, after having its dividend suspended for the duration of 2020. Movado now has a forward dividend $0.40 and a dividend yield of 1.58%. Additionally, on March 18, MOV announced that it will report its fourth quarter and fiscal year 2021 earnings results on Thursday, March 25.

Movado has only outperformed estimates on half of its most recent earnings reports. For the fourth quarter of 2020, MOV missed analyst estimates by a margin of $0.06 and reported an earnings per share (EPS) of $0.15. For the first quarter of 2021, Movado stock decreased its EPS to -$0.56 and missed expectations by a margin of $0.36. For the second quarter of 2021, MOV had an increase in earnings, rising to -$0.07 per share. Movado also beat estimates by a margin of $0.24. In the most recent quarterly report, Movado reported an EPS of $0.70 and beat expectations by $0.22.

Movado stock has increased 168% year-over-year. MOV stock price is also up 47% year-to-date and has tripled in price since dropping to its muti-year low of $8.12. Shares of Movado stock currently trade within in a chip-shot of its recent annual high of $26.22.

Fundamentally, MOV is lacking on the bottom line, but has potential as a turnaround growth stock play. Over the past year, Movado has experienced heavy losses on both its revenues and net income. The company's revenues fell $180 million in the past twelve months, bringing its total revenues down to $519 million and virtually wiping out over two years of growth. Movado also lost $180 million on the bottom-line, bringing total net losses down to $138 million. However, its net income had been at a decline since 2019.

Movado holds $163.52 million in cash, which is about $40 million more than it has in debt. This positive ratio gives the company freedom and time, which will be necessary for it to recover from its huge losses during the COVID-19 pandemic. Overall, Movado stock ranks on the safer side of speculative plays from a primarily fundamental perspective.

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