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The Cato
(NYSE:CATO)
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Rating:44Neutral
Price Target:
$3.00
▼(-14.04% Downside)
Action:Reiterated
Date:08/21/26
The score is held back primarily by weak/uneven fundamentals (still negative operating profitability and negative/volatile free cash flow) and very expensive valuation (P/E ~304). Technicals also remain soft with the stock below key moving averages, partially offset by a positive corporate update showing improved profitability and same-store sales growth (though aided by a one-time tariff refund).
Positive Factors
Sales Rebound
The TTM sales rebound and materially narrower losses indicate improving demand and operating execution. Although performance remains uneven, this creates a stronger base for earnings recovery if customer spending and merchandise productivity stabilize.
Negative Factors
Weak Customer Demand
Persistent inflation, higher fuel prices and elevated interest rates are reducing customers’ discretionary income. Management expects this pressure to continue, creating a durable risk to sales, traffic and merchandise demand.
Read all positive and negative factors
Positive Factors
Negative Factors
Sales Rebound
The TTM sales rebound and materially narrower losses indicate improving demand and operating execution. Although performance remains uneven, this creates a stronger base for earnings recovery if customer spending and merchandise productivity stabilize.
Read all positive factors
The Cato (CATO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$74.85M
Dividend YieldN/A
Average Volume (3M)57.80K
Price to Earnings (P/E)304.0
Beta (1Y)0.74
Revenue Growth-1.10%
EPS Growth71.24%
CountryUS
Employees6,700
SectorConsumer Cyclical
Sector Strength84
IndustryApparel - Retail
Share Statistics
EPS (TTM)0.01
Shares Outstanding18,195,206
10 Day Avg. Volume67,079
30 Day Avg. Volume57,801
Financial Highlights & Ratios
PEG Ratio0.14
Price to Book (P/B)0.37
Price to Sales (P/S)0.09
P/FCF Ratio-11.13
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
The Cato Business Overview & Revenue Model
Company Description
The Cato Corporation, encompassing its subsidiary entities, operates as a specialized vendor of fashionable clothing and accompanying accessories, with its primary market centered in the southeastern region of the United States. Its business model...
How the Company Makes Money
Cato generates revenue primarily by selling apparel, shoes, and fashion accessories directly to consumers. Its main revenue streams are (1) in-store retail sales across its branded store formats and (2) online sales through its e-commerce operatio...
The Cato Financial Statement Overview
Summary
Income Statement
44
Neutral
Balance Sheet
53
Neutral
Cash Flow
41
Neutral
| Breakdown | TTM | Jan 2026 | Jan 2025 | Jan 2024 | Jan 2023 | Jan 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 654.67M | 653.81M | 649.81M | 708.06M | 759.26M | 769.27M |
| Gross Profit | 216.44M | 212.28M | 203.55M | 233.88M | 238.52M | 303.85M |
| EBITDA | 7.75M | 2.49M | -6.24M | -3.90M | 12.94M | 51.39M |
| Net Income | -228.00K | -5.91M | -18.61M | -22.59M | 41.00K | 34.91M |
Balance Sheet | ||||||
| Total Assets | 439.18M | 421.42M | 452.36M | 486.82M | 553.14M | 633.77M |
| Cash, Cash Equivalents and Short-Term Investments | 83.64M | 76.32M | 77.70M | 102.95M | 128.66M | 165.76M |
| Total Debt | 145.03M | 150.45M | 145.90M | 153.12M | 174.77M | 184.33M |
| Total Liabilities | 272.48M | 264.11M | 290.06M | 294.50M | 326.55M | 379.57M |
| Stockholders Equity | 166.71M | 157.31M | 162.30M | 192.32M | 226.59M | 254.20M |
Cash Flow | ||||||
| Free Cash Flow | -1.09M | -5.22M | -27.62M | -12.05M | -6.06M | 55.68M |
| Operating Cash Flow | 2.72M | -1.46M | -19.75M | 477.00K | 13.37M | 59.79M |
| Investing Cash Flow | -8.44M | -1.30M | 28.96M | 19.78M | 16.02M | -25.33M |
| Financing Cash Flow | -212.00K | -851.00K | -14.05M | -16.13M | -29.28M | -31.80M |
The Cato Technical Analysis
Negative
3.49
Price Trends
3.30
Negative
3.14
Negative
3.18
Negative
Market Momentum
0.02
Positive
41.92
Neutral
65.86
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CATO, the sentiment is Negative. The current price of 3.49 is above the 20-day moving average (MA) of 3.35, above the 50-day MA of 3.30, and above the 200-day MA of 3.18, indicating a bearish trend. The MACD of 0.02 indicates Positive momentum. The RSI at 41.92 is Neutral, neither overbought nor oversold. The STOCH value of 65.86 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CATO.
The Cato Risk Analysis
The Cato disclosed 28 risk factors in its most recent earnings report. The Cato reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
The Cato Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
60 Neutral | $2.79B | 9.70 | 17.24% | 2.94% | 6.22% | 65.05% | |
58 Neutral | $305.76M | 14.62 | 16.83% | 1.50% | -2.59% | -39.23% | |
58 Neutral | $215.96M | -16.44 | 6.03% | ― | -10.09% | -232.12% | |
53 Neutral | $44.71M | -5.07 | -903.25% | ― | -10.40% | 83.52% | |
53 Neutral | $119.51M | -38.69 | -3.98% | ― | 1.69% | 93.35% | |
44 Neutral | $74.85M | 304.00 | -0.14% | ― | -1.10% | 71.24% |
* Consumer Cyclical Sector Average
CATO
The Cato
3.04
-0.66
-17.84%
AEO
American Eagle
16.00
3.49
27.94%
TLYS
Tilly's
3.83
2.04
113.97%
JILL
JJill
20.32
3.72
22.42%
CURV
Torrid Holdings
2.09
-0.19
-8.33%
LVLU
Lulu's Fashion Lounge Holdings
14.91
10.75
259.16%
The Cato Corporate Events
Business Operations and StrategyExecutive/Board ChangesFinancial DisclosuresShareholder Meetings
The Cato Shareholders Approve Proposals at Annual Meeting
Positive
May 26, 2026
The Cato Corporation reported a sharp improvement in profitability for the first quarter ended May 2, 2026, with net income rising to $9.3 million, or $0.47 per diluted share, from $3.3 million, or $0.17 per share, a year earlier, on sales that in...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.