Interested in analysing True Religion Jeans (TRLG)? To get you started, we’ve compiled a few links to Kapitall tools that will help you evaluate the company. We’ll also provide some perspective on the key data points you’ll need to consider.
How Big is the Company Relative to Competitors?
Market cap is the public’s perception of a firm’s total value, calculated by multiplying the company’s total number of shares available for trade by the price of each share.
In general, large-cap companies (bigger market caps) tend to be less risky than small-cap companies (smaller market caps). So, if you’re worried about taking too much risk, try to focus on the bigger companies.
The Compar-O-Matic makes it easy to compare the market cap values of various companies over different periods of time. Once you start comparing the size of various companies, be sure to click on the “Play” button below the Compar-O-Matic.
Key Questions to Ask: After you press the “Play” button below, pay attention to the fluctuations of a company’s market cap over time. Is the company’s value fluctuating more than the competition? If it is, it may be a signal that the company is a riskier investment.
How Has Wall Street’s Opinion on the Stock Changed Over Time?
Wall Street analysts are paid to research companies, and make recommendations to their clients whether they should “sell”, “hold” or “buy” the underlying stock.
To arrive at the “average analyst rating”, Zacks Investment Research surveys all the analysts following a stock, and averages their recommendations to arrive at the group consensus.
Looking at a stock’s rating at a particular point in time is interesting, but it’s far more interesting to evaluate the trends in analyst opinion over time. The chart below shows how the True Religion Jeans analyst rating has changed over the last 5 years.
Key Questions to Ask: Have analysts become more, or less bullish about a stock’s prospects? Remember – Wall Street analysts often get it wrong, so only use their opinion as a starting point for your own analysis.
Evaluate the Company’s Earnings History
Every three months, companies report their quarterly earnings results. Of course, these earnings are closely watched by Wall Street analysts, and many of them submit “earnings estimates” in the days leading up to company announcements.
If a company’s actual earnings result is better than these analyst estimates, we say that the company has “beat analyst earnings estimates”. This is a positive development for the company, since it shows that Wall Street analysts are underestimating the company’s ability to create profits.
If, on the other hand, the company reports weaker than expected earnings results, it could lead to weakness in the stock price as investors re-evaluate their estimates of the company’s future profitability.
The following chart shows the performance of True Religion Jeans earnings relative to analyst estimates over the last three years. It also shows the stock price movement.
A green triangle indicates an earnings result that beat analyst estimates, while a red arrow indicates an earnings result that came in weaker than expected.
Key Questions to Ask: Has the company consistently beaten analyst earnings estimates? Has there been a divergence between the company’s earnings results and the stock’s direction?