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The Cato
(NYSE:CATO)
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Rating:42Neutral
Price Target:
$2.50
▼(-9.75% Downside)
Action:Reiterated
Date:08/29/26
The score is held down primarily by weak financial performance (recent losses and negative margins despite some stabilization) and bearish technicals (price below key moving averages with negative MACD). Positive TTM operating and free cash flow provide some support, but unprofitability (negative P/E) limits valuation attractiveness based on the provided data.
Positive Factors
Positive equity and manageable leverage
Debt below equity and a positive capital base provide financial support while the company works through operating weakness. Although leverage is not conservative, the balance sheet offers more flexibility than a highly indebted structure.
Negative Factors
Declining and volatile revenue
Sustained revenue weakness indicates challenges in customer demand, traffic, or merchandising execution. Lower sales reduce operating leverage across stores and make it harder to absorb fixed occupancy, labor, and distribution costs.
Read all positive and negative factors
Positive Factors
Negative Factors
Positive equity and manageable leverage
Debt below equity and a positive capital base provide financial support while the company works through operating weakness. Although leverage is not conservative, the balance sheet offers more flexibility than a highly indebted structure.
Read all positive factors
The Cato (CATO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$51.77M
Dividend Yield15.08%
Average Volume (3M)166.51K
Price to Earnings (P/E)―
Beta (1Y)0.78
Revenue Growth-1.10%
EPS Growth70.99%
CountryUS
Employees6,700
SectorConsumer Cyclical
Sector Strength84
IndustryApparel - Retail
Share Statistics
EPS (TTM)-0.30
Shares Outstanding18,148,296
10 Day Avg. Volume158,741
30 Day Avg. Volume166,507
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 from retail sales of apparel and fashion accessories to consumers through (1) its physical store base and (2) its online sales channel. Its core revenue stream is merchandise sales, which are driven by customer tra...
The Cato Financial Statement Overview
Summary
Income Statement
38
Negative
Balance Sheet
55
Neutral
Cash Flow
46
Neutral
| Breakdown | TTM | Jan 2026 | Jan 2025 | Jan 2024 | Jan 2023 | Jan 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 643.67M | 653.81M | 649.81M | 708.06M | 759.26M | 769.27M |
| Gross Profit | 207.00M | 212.28M | 203.55M | 233.88M | 238.52M | 303.85M |
| EBITDA | -37.00K | 2.49M | -6.24M | -3.90M | 12.94M | 51.39M |
| Net Income | -5.59M | -5.91M | -18.61M | -22.59M | 41.00K | 34.91M |
Balance Sheet | ||||||
| Total Assets | 423.44M | 421.42M | 452.36M | 486.82M | 553.14M | 633.77M |
| Cash, Cash Equivalents and Short-Term Investments | 96.44M | 76.32M | 77.70M | 102.95M | 128.66M | 165.76M |
| Total Debt | 138.63M | 150.45M | 145.90M | 153.12M | 174.77M | 184.33M |
| Total Liabilities | 255.53M | 264.11M | 290.06M | 294.50M | 326.55M | 379.57M |
| Stockholders Equity | 167.91M | 157.31M | 162.30M | 192.32M | 226.59M | 254.20M |
Cash Flow | ||||||
| Free Cash Flow | 1.63M | -5.22M | -27.62M | -12.05M | -6.06M | 55.68M |
| Operating Cash Flow | 5.44M | -1.46M | -19.75M | 477.00K | 13.37M | 59.79M |
| Investing Cash Flow | -4.28M | -1.30M | 28.96M | 19.78M | 16.02M | -25.33M |
| Financing Cash Flow | -267.00K | -851.00K | -14.05M | -16.13M | -29.28M | -31.80M |
The Cato Technical Analysis
Negative
2.77
Price Trends
3.18
Negative
3.12
Negative
3.13
Negative
Market Momentum
-0.19
Positive
32.74
Neutral
12.93
Positive
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 2.77 is below the 20-day moving average (MA) of 2.99, below the 50-day MA of 3.18, and below the 200-day MA of 3.13, indicating a bearish trend. The MACD of -0.19 indicates Positive momentum. The RSI at 32.74 is Neutral, neither overbought nor oversold. The STOCH value of 12.93 is Positive, 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 | $2.91B | 10.54 | 17.24% | 2.88% | 6.22% | 65.05% | |
60 Neutral | $298.73M | 14.37 | 16.83% | 1.82% | -2.59% | -39.23% | |
56 Neutral | $134.58M | 61.97 | 2.37% | 12.82% | 6.07% | ― | |
49 Neutral | $242.83M | -26.99 | 4.27% | ― | -11.16% | -384.28% | |
49 Neutral | $34.29M | -4.06 | -903.25% | ― | -10.40% | 83.52% | |
42 Neutral | $51.77M | -8.67 | -3.39% | 15.08% | -1.10% | 70.99% |
* Consumer Cyclical Sector Average
CATO
The Cato
2.60
-2.12
-44.92%
AEO
American Eagle
17.39
-0.44
-2.47%
TLYS
Tilly's
4.40
2.41
121.11%
JILL
JJill
19.98
2.26
12.74%
CURV
Torrid Holdings
2.44
0.79
47.88%
LVLU
Lulu's Fashion Lounge Holdings
11.94
7.83
190.51%
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.