Analysts Look Mixed on Canada Goose After Quiet Period Ends

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Canada Goose Holdings Inc. (NYSE: GOOS) recently came public with an initial public offering (IPO) back in mid-March, and its quiet period has just come to a close. A few underwriters from the offering took this opportunity to weigh in on the stock, as well as a few other analysts.

For some quick background: This company was founded 60 years ago in a small Toronto warehouse. Canada Goose has grown into one of the world’s most desired outerwear brands. Across the globe, it is recognized for authentic heritage, uncompromised craftsmanship and quality, exceptional warmth and superior functionality. This reputation is decades in the making and is rooted in the firm’s commitment to creating premium products that deliver unrivaled functionality where and when it is needed most.

Canada Goose operates a vertically integrated business model that allows it to directly control the design and development of its products while capturing higher margins. These products are sold through select outdoor, luxury and online retailers and distributors in 36 countries; its e-commerce sites in Canada, the United States, the United Kingdom and France; and two recently opened retail stores in Toronto and New York City.

The company recently detailed its finances as follows:

The power of our business model and our ability to profitably scale our operations are reflected in our financial performance. In fiscal 2016, we had revenue of $290.8 million, net income of $26.5 million, Adjusted EBITDA of $54.8 million, Adjusted EBITDA Margin of 18.9% and Adjusted Net Income of $35.5 million. We grew our revenue at a 38.3% compound annual growth rate (“CAGR”) and Adjusted EBITDA at an 87.7% CAGR from fiscal 2014 to fiscal 2016, while expanding our Adjusted EBITDA Margin from 10.2% to 18.9% over the same period.

The underwriters from its original IPO were CIBC Capital Markets, Credit Suisse, Goldman Sachs, RBC Capital Markets, Merrill Lynch, Morgan Stanley, Barclays, BMO, TD and Wells Fargo.

Analysts had this to say after the quiet period:

  • CIBC started it with a Sector Perform rating.
  • Barclays initiated it an Overweight rating.
  • Nomura initiated the shares a Neutral rating.
  • Goldman Sachs initiated it with a Buy rating.
  • BMO Capital initiated it an Outperform rating.
  • Baird initiated it a Neutral rating.
  • Merrill Lynch started the stock with a Neutral rating.
  • Wells Fargo initiated it at Outperform.
  • Credit Suisse initiated it at Outperform.
  • RBC also initiated it with an Outperform rating.
  • Canaccord Genuity initiated shares with a Buy rating.
  • Instinet started it with a Neutral rating.

Shares of Canada Goose were last seen up 0.9% at $16.90 on Monday, with a post-IPO trading range of $15.20 to $18.40.