Schaeffer's 43rd Anniversary Stock Picks in 2024

Designer Stock Struggles With Overhead Resistance After Bear Gap

Can Vera Bradley stock shake off its recent bearish run?

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Vera Bradley, Inc. (NASDAQ:VRA) is a designer of women’s handbags, luggage and other travel items, fashion and home accessories, and unique gifts. VRA operates two unique lifestyle brands, Vera Bradley and Pura Vida. The brands are known for their innovative designs, patterns, and colors. This afternoon, VRA was last seen trading down 1.6% at $10.00.

On Sept. 1, Vera Bradley announced its Q2 of 2021 financial results. VRA reported an earnings per share (EPS) of $0.28, missing consensus estimates by a slight margin of $0.05. Vera Bradley's CEO Rob Wallstrom cited issues with the Apple iOS 14.5 update that negatively impacted the effectiveness of Pura Vida's Facebook and Instagram marketing campaigns, as well as predicted that supply chain challenges will continue to impact the fashion company's margins over the next few months.

Vera Bradley stock has increased approximately 30% in price year-over-year and is up 68% since bottoming at a 52-week low of $6.05 last September. Additionally, shares of VRA have grown 25% year-to-date -- compared to the S&P 500's 20% -- but remains off 26% from its June two-year high of $13.62. Overhead pressure also remains at the 200-day moving average, which has acted as a ceiling since the stock's early September bear gap.

Vera Bradley stock has an attractive forward price-earnings ratio of 13.70, which is an improvement over VRA's current price-earnings ratio of 14.74. Overall, Vera Bradley stock offers potential investors decent reward potential as a value stock, but VRA also carries a higher risk due the designer brand’s lack of consistency in revenue or net income growth over the years.

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