Coty (COTY) AI Stock Analysis

• Market Cap: $4.51B
• Dividend Yield: N/A
• Average Volume (3M): 7.50M
• Price to Earnings (P/E): 40.1
• Beta (1Y): 0.85
• Revenue Growth: -1.68%
• EPS Growth: -302.11%
• Country: US
• Employees: 11,791
• Sector: Consumer Cyclical
• Sector Strength: 61
• Industry: Household & Personal Products
• EPS (TTM): 0.01
• Shares Outstanding: 871,993,300
• 10 Day Avg. Volume: 6,273,498
• 30 Day Avg. Volume: 7,495,283
• PEG Ratio: -2.94
• Price to Book (P/B): 1.05
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 13.58
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $6.36
• Price Target Upside: 35.61% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 18

Coty's stock is supported by strong cash flow and sales growth but faces challenges with profitability and technical momentum. The mixed earnings call outlook, with strategic growth plans offset by short-term market pressures, results in a middling stock score. Valuation concerns further weigh on the overall assessment.

Positive Factors

Cost Management

Coty is taking a proactive approach to reduce costs and mitigate tariff exposure related to premium fragrances imports from Europe into the U.S.

Innovation and Brand Building

Focus on mass fragrance and the longevity of prestige fragrance is aligned with Coty's strengths in innovation and brand building.

Valuation

Despite the challenges, valuation is looking more compelling.

Negative Factors

Execution Risk

There is a modest degree of execution risk in Coty's turnaround plan due to the number of goals the company is trying to accomplish.

Product Performance

Prestige fragrance is now underperforming the industry as well as the rest of the prestige business in a category that is generally resilient and continues to see growth.

Sales Trends

Sales trends continue to worsen driven by the need to clean up retail inventory, a normalizing beauty market, and tough compares.

Coty Business Overview & Revenue Model

Company Description

Coty Inc., together with its subsidiaries, engages in the manufacture, marketing, distribution, and sale of beauty products worldwide. The company provides prestige fragrances, skin care, and color cosmetics products through prestige retailers, including perfumeries, department stores, e-retailers, direct-to-consumer websites, and duty-free shops under the Alexander McQueen, Burberry, Bottega Veneta, Calvin Klein, Cavalli, Chloe, Davidoff, Escada, Gucci, Hugo Boss, Jil Sander, Joop!, Kylie Jenner, Lacoste, Lancaster, Marc Jacobs, Miu Miu, Nikos, philosophy, Kim Kardashian West, and Tiffany & Co. brands. It also offers mass color cosmetics, fragrance, skin care, and body care products primarily through hypermarkets, supermarkets, drug stores, pharmacies, mid-tier department stores, traditional food and drug retailers, and e-commerce retailers under the Adidas, Beckham, Biocolor, Bozzano, Bourjois, Bruno Banani, CoverGirl, Jovan, Max Factor, Mexx, Monange, Nautica, Paixao, Rimmel, Risque, Sally Hansen, Stetson, and 007 James Bond brands. Coty Inc. also sells its products through third-party distributors to approximately 150 countries and territories. The company was founded in 1904 and is based in New York, New York. Coty Inc. is a subsidiary of Cottage Holdco B.V.

How the Company Makes Money

Coty Inc. generates revenue primarily through the sale of its beauty products across its two main segments: Consumer Beauty and Luxury. The Consumer Beauty segment, which accounts for a significant portion of the company's sales, targets the mass market with products available in drugstores, supermarkets, and online platforms. This segment's revenue comes from the sale of cosmetics, hair color, and styling products. The Luxury segment derives its revenue from premium-priced fragrances and skincare products, often sold in department stores, specialty retailers, and high-end digital platforms. Coty also benefits from strategic partnerships and licensing agreements with top fashion houses and celebrities, which help in enhancing brand visibility and expanding market reach. Additionally, Coty invests in marketing and innovation to maintain and grow its customer base in a highly competitive beauty industry.

Coty Financial Statement Overview

Summary

Coty's financial performance reflects strong sales growth and efficient operations, as evidenced by a high gross profit margin and stable EBIT and EBITDA margins. The company demonstrates robust cash flow generation, although profitability remains a challenge with a low net profit margin and ROE. The balance sheet shows low leverage and a healthy equity structure, enhancing financial stability.

Income Statement

Coty's income statement shows a strong gross profit margin of 64.6% for TTM (Trailing-Twelve-Months), indicating efficient production cost management. The net profit margin is a modest 0.2%, reflecting challenges in translating revenues into profits. The revenue growth rate from 2023 to 2024 is 9.7%, suggesting positive sales momentum. EBIT and EBITDA margins are stable at 10.2% and 13.1%, respectively, demonstrating consistent operational efficiency.

Balance Sheet

The balance sheet reveals a debt-to-equity ratio of 0.07 for TTM, indicating low leverage and reduced financial risk. The return on equity (ROE) stands at 0.3%, showing limited profitability for shareholders. Equity ratio is healthy at 32.3%, signifying a solid capital structure with adequate equity financing. Overall, the balance sheet is stable but with room for improvement in profitability.

Cash Flow

Coty's cash flow statement is strong, with a free cash flow growth rate of 15.2% from 2023 to 2024, indicating robust cash generation. Operating cash flow to net income ratio is high at 52.8, suggesting strong cash conversion from earnings. Free cash flow to net income ratio is 28.8, reflecting effective cash management. The company's cash flow performance underscores its financial health and liquidity.

Breakdown
TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
6.09B	6.12B	5.55B	5.30B	4.63B	4.72B
	Gross Profit
3.93B	3.94B	3.55B	3.37B	2.77B	2.73B
	EBIT
620.20M	546.70M	543.70M	690.40M	197.70M	-614.90M
	EBITDA
798.00M	849.10M	964.70M	856.30M	603.60M	-531.70M
	Net Income Common Stockholders
13.50M	89.40M	508.20M	259.50M	-67.80M	-1.09B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
249.60M	300.80M	246.90M	233.30M	253.50M	308.30M
	Total Assets
11.72B	12.08B	12.66B	12.12B	13.69B	16.73B
	Total Debt
3.66B	4.26B	4.48B	4.71B	5.69B	8.40B
	Net Debt
3.41B	3.96B	4.24B	4.48B	5.44B	8.09B
	Total Liabilities
7.51B	7.83B	8.43B	8.56B	9.51B	12.71B
	Stockholders Equity
3.78B	3.83B	3.95B	3.30B	3.90B	3.72B
Cash Flow		Free Cash Flow
293.50M	369.40M	402.90M	552.50M	144.80M	-318.30M
	Operating Cash Flow
538.40M	614.60M	625.70M	726.60M	318.70M	-50.90M
	Investing Cash Flow
-215.00M	-226.20M	-118.20M	269.70M	2.44B	-833.40M
	Financing Cash Flow
-512.10M	-336.70M	-469.30M	-1.03B	-2.80B	877.30M

Coty Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 4.69
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For COTY, the sentiment is Negative. The current price of 4.69 is below the 20-day moving average (MA) of 4.94, below the 50-day MA of 5.27, and below the 200-day MA of 7.29, indicating a bearish trend. The MACD of -0.12 indicates Positive momentum. The RSI at 40.08 is Neutral, neither overbought nor oversold. The STOCH value of 30.70 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for COTY.

Coty Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IPAR	79 Outperform	$3.85B	21.45	22.16%	2.56%	10.32%	18.55%
ELF	67 Neutral	$3.82B	40.25	14.24%	―	46.27%	-26.45%
EPC	65 Neutral	$1.45B	16.76	5.53%	2.22%	-2.11%	-28.79%
HELE	63 Neutral	$625.88M	5.05	7.45%	―	-4.93%	-23.61%
COTY	62 Neutral	$4.51B	40.12	-10.58%	―	-1.68%	-302.11%
Sector *	61 Neutral	$6.68B	11.75	3.01%	3.94%	2.61%	-21.96%
EL	53 Neutral	$21.94B	147.29	-17.27%	3.31%	-3.70%	-235.59%

Coty Corporate Events

Coty Reports Strong Margins Despite Revenue Challenges

On February 7, 2025, Maria Asuncion Aramburuzabala Larregui resigned from Coty’s Board of Directors for personal reasons after four years of service, without any disagreements with the company. Coty reported its financial results for the first half and second quarter of fiscal year 2025, showing strong gross and operating margin expansion despite a decrease in net revenue due to FX impacts and divestitures. The prestige fragrance category outperformed, although broader challenges in the APAC region and pressured mass beauty markets impacted overall sales performance. The company achieved its lowest leverage in over eight years and continues to focus on strategic growth pillars.