Can Rocky Brands Stock Climb Out of This Bear Market?

Rocky Brands Inc (NASDAQ:RCKY) is a small-cap footwear company valued at a market cap of $250 million. RCKY design, manufacture, and market footwear and apparel under a portfolio of brands that include Rocky, Georgia Boot, Durango, Lehigh, The Original Muck Boot Company, XTRATUF, Servus, NEOS, and Ranger. Specifically, the footwear company’s brands offer outdoor, work, western, and military footwear, and other outdoor and work apparel and accessories.

Guided lower by its 40-day moving average during the second quarter, RCKY is down 14.1% year-to-date and $38.5% year-over-year. It just logged a 17.8% drop for its latest quarter, though the stock has come slightly off its June 17 annual low of $31.26. 

Moreover, Rocky Brands stock now provides a low valuation at a price-earnings ratio of 11.17 and a price-sales ratio of 0.44. RCKY also offers a dividend yield of 1.81% with a forward dividend of $0.62, making the reward potential more attractive for long-term and dividend investors. In addition, the footwear company is estimated to complete fiscal 2022 with 24% revenue growth and 25.5% earnings growth. Rocky Brands is also expected to increase its revenues 4.3% and its earnings 23.2% for fiscal 2023.

RCKY comes with a high level of risk due to its weak balance sheet. The footwear company currently owes $275.94 million in total debt, which is over $25 million more than the company’s market cap. Rocky Brands also holds just $14.95 million in cash on its balance sheet, which will undoubtedly hurt the business’ long-term growth rate and profitability. Overall, Rocky Brands stock is a very dangerous play for fundamental-based investors, but could prove to be decent option if the footwear name meets its high earnings growth projections.