Movado’s Rally Faces Questions Over Growth and Cash Generation

Movado shares climbed 38.4% over six months to $33.58, outperforming the S&P 500 by 17.2%, according to StockStory. The publisher says it remains cautious, citing weak long-term growth and cash generation.

Movado reported $689.9 million in sales for the trailing 12 months, close to its revenue five years earlier. StockStory says the limited growth points to difficulty sustaining demand.

The publisher also flagged an average free cash flow margin of 6.5% over the past two years. It said that level is below what it expects from a consumer discretionary business and limits the company’s ability to return capital to shareholders.

StockStory said Movado’s return on invested capital has declined over the past few years, adding to concerns about its growth prospects. It also noted the shares traded at 9.9 times forward EV-to-EBITDA, a valuation the publisher said reflects optimism about the company.