Coty (COTY) AI Stock Analysis

• Market Cap: $4.48B
• Dividend Yield: N/A
• Average Volume (3M): 7.71M
• Price to Earnings (P/E): 40.1
• Beta (1Y): 0.92
• Revenue Growth: -1.68%
• EPS Growth: -302.11%
• Country: US
• Employees: 11,791
• Sector: Consumer Cyclical
• Sector Strength: 59
• Industry: Household & Personal Products
• EPS (TTM): 0.01
• Shares Outstanding: 872,290,000
• 10 Day Avg. Volume: 6,870,307
• 30 Day Avg. Volume: 7,710,395
• PEG Ratio: 0.25
• Price to Book (P/B): 2.64
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 25.90
• Enterprise Value/Market Cap: 3.27
• Enterprise Value/Revenue: 0.60
• Enterprise Value/Gross Profit: 3.79
• Enterprise Value/Ebitda: 5.20
• 1Y Price Target: $6.23
• Price Target Upside: 22.88% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 17

• Rating: 59 Neutral
• Price Target: $5.00 ▼(-1.38%Downside)

Coty's overall stock score reflects a combination of strengths in strategic initiatives and challenges in financial performance and market conditions. The company's robust gross margins and strategic focus on growth in fragrances are positive, but profitability issues, negative valuation metrics, and market pressures present significant risks.

Positive Factors

Consumer Beauty Revitalization

Management is taking steps to revive the Consumer Beauty segment, which is a significant part of the company's sales.

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.

Valuation

Despite the challenges, valuation is looking more compelling.

Negative Factors

Execution Risks

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.

Prestige Fragrance Pressure

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 Decline

Sales for the March-end quarter were down -6.2% YOY on a reported basis, with results underperforming expectations and the Prestige business worsening.

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 beauty products across its Consumer Beauty and Prestige segments. In the Consumer Beauty segment, the company earns money by selling mass-market products through various retail channels, including drugstores, supermarkets, and e-commerce platforms. The Prestige segment focuses on high-end, luxury beauty products sold in department stores, specialty retailers, and online. Coty's revenue streams are bolstered by strategic partnerships and licensing agreements with fashion and celebrity brands, which allow it to expand its product offerings and enhance brand recognition. Additionally, Coty invests in marketing and innovation to maintain competitive positioning and drive sales growth.

Coty Financial Statement Overview

Summary

Coty's financial performance is mixed, with strong gross margins but a significant decline in net income impacting profitability. The balance sheet shows improved leverage and a stable equity position, while cash flow generation remains positive despite the net loss. However, challenges in revenue growth and profitability require strategic focus.

Income Statement

Coty experienced fluctuating revenue growth, with a decline in TTM revenue compared to the previous year. The gross profit margin remained strong at 64.43% TTM, but the net profit margin turned negative at -6.59% due to a substantial net loss. The EBIT and EBITDA margins also decreased, indicating challenges in maintaining operational efficiency.

Balance Sheet

The debt-to-equity ratio improved slightly, reflecting better leverage management, with a ratio of 1.12 TTM. However, the return on equity declined to -10.89% due to negative net income. The equity ratio is healthy at 31.72%, indicating a substantial equity buffer against liabilities.

Cash Flow

The company's free cash flow decreased slightly TTM, with a free cash flow to net income ratio being negative due to the net loss. The operating cash flow to net income ratio was positive at 1.48 TTM, showing cash-generating operations despite the net loss.

Breakdown
TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
6.00B	6.12B	5.55B	5.30B	4.63B	4.72B
	Gross Profit
3.87B	3.94B	3.55B	3.37B	2.77B	2.73B
	EBIT
262.00M	546.70M	543.70M	690.40M	197.70M	-614.90M
	EBITDA
288.30M	849.10M	964.70M	856.30M	603.60M	-531.70M
	Net Income Common Stockholders
-396.00M	89.40M	508.20M	259.50M	-67.80M	-1.09B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
243.50M	300.80M	246.90M	233.30M	253.50M	308.30M
	Total Assets
11.47B	12.08B	12.66B	12.12B	13.69B	16.73B
	Total Debt
4.09B	4.26B	4.48B	4.71B	5.69B	8.40B
	Net Debt
3.85B	3.96B	4.24B	4.48B	5.44B	8.09B
	Total Liabilities
7.55B	7.83B	8.43B	8.56B	9.51B	12.71B
	Stockholders Equity
3.64B	3.83B	3.95B	3.30B	3.90B	3.72B
Cash Flow		Free Cash Flow
362.40M	369.40M	402.90M	552.50M	144.80M	-318.30M
	Operating Cash Flow
585.90M	614.60M	625.70M	726.60M	318.70M	-50.90M
	Investing Cash Flow
-144.80M	-226.20M	-118.20M	269.70M	2.44B	-833.40M
	Financing Cash Flow
-456.70M	-336.70M	-469.30M	-1.03B	-2.80B	877.30M

Coty Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 5.07
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For COTY, the sentiment is Positive. The current price of 5.07 is above the 20-day moving average (MA) of 4.96, above the 50-day MA of 4.99, and below the 200-day MA of 6.79, indicating a neutral trend. The MACD of <0.01 indicates Negative momentum. The RSI at 53.11 is Neutral, neither overbought nor oversold. The STOCH value of 72.81 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for COTY.

Coty Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IPAR	82 Outperform	$4.48B	27.12	22.16%	2.29%	10.32%	18.55%
ELF	75 Outperform	$6.64B	61.42	15.97%	―	28.28%	-14.79%
EPC	69 Neutral	$1.23B	15.27	5.53%	2.29%	-2.11%	-28.79%
HELE	64 Neutral	$678.87M	5.27	7.45%	―	-4.93%	-23.61%
Sector *	63 Neutral	$6.98B	11.41	2.80%	4.24%	2.68%	-24.94%
COTY	59 Neutral	$4.48B	40.12	-10.58%	―	-1.68%	-302.11%
EL	59 Neutral	$25.35B	147.29	-17.27%	1.99%	-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.