Popular Bear Thesis Creates Probabilistic Opportunity, Francesca's

Income Statement

Revenue, Gross Profit:

Operating Income, EBIT, EBITDA:

Balance Sheet

Cash Flow

ROIC

Relative Valuation Deep Discount:

Intrinsic Value:

There were only 4 other Apparel Industry peers that had an enterprise value less than the discounted FCF. I took the annual prior 5-year average FCF. Then discounted that average annual FCF using an 8% rate for 10 years. Francesca's Holdings (FRAN) and 4 more passed this simple discount to intrinsic value test. The other 4 were CATO, EXPR, BKE, and CHS.

Catalyst: Continued profitable growth above the cost of capital with share buybacks. Stable same-store sales comparisons, steady margins, and investor confidence in new leadership. Financial evidence of an improved merchandise strategy.
 

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 Long: FRAN

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