Outdoor and recreation products provider Yeti Holdings, Inc. (YETI) recently delivered better-than-expected Q3 performance on the back of robust demand in its Drinkware and Coolers & Equipment segments. Additionally, the company also upped its outlook for full-year fiscal 2021.
̆Based on these developments, let us look at the changes in Yeti’s key risk factors that investors should know.
According to the TipRanks Risk Factors tool, Yeti’s top two risk categories are Finance & Corporate, and Ability to Sell, each accounting for 30% of the total 53 risks identified. In its recent Q3 report, the company has changed two key risk factors.
Firstly, under the Finance & Corporate risk category, Yeti noted that its business may be harmed if it is not able to accurately forecast its results and growth rate. As the company expands into new markets and geographies, and brings new products to market amid the COVID-19 pandemic, forecasting future results becomes difficult.
Any failure to make accurate forecasts may lead to Yeti making poor operating decisions, facing excess inventory levels, or a shortage of products to deliver to consumers.
Secondly, under the Macro & Political risk category, Yeti highlighted that the COVID-19 pandemic may lead to lower consumer discretionary spending while its negative impact on the global supply chain continues. This could adversely impact yeti’s business, sales, financial condition, and the company’s ability to tap current or new lending facilities. (See Insiders’ Hot Stocks on TipRanks)
Compared to a sector average of 14%, Yeti’s Macro & Political risk factor is at 11%.
Wall Street’s Take
In response to Yeti’s Q3 showing, UBS analyst Peter Grom reiterated a Hold rating on the stock, and increased the price target to $99 from $92. The analyst expects Yeti’s robust revenue momentum to continue, but believes it is already factored in by the market in Yeti’s valuation.
Consensus on the Street is a Moderate Buy based on 7 Buys and 3 Holds. At the time of writing, the average Yeti Holdings price target was $111.90, which implies upside potential of 9.6% for the stock. Shares are up 49.1% so far this year.