Coty (COTY) AI Stock Analysis

• Market Cap: $4.28B
• Dividend Yield: N/A
• Average Volume (3M): 8.48M
• Price to Earnings (P/E): 40.1
• Beta (1Y): 0.87
• Revenue Growth: -1.68%
• EPS Growth: -302.11%
• Country: US
• Employees: 11,791
• Sector: Consumer Cyclical
• Sector Strength: 57
• Industry: Household & Personal Products
• EPS (TTM): 0.01
• Shares Outstanding: 872,290,000
• 10 Day Avg. Volume: 10,723,194
• 30 Day Avg. Volume: 8,479,831
• 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: 3.43
• Enterprise Value/Revenue: 0.60
• Enterprise Value/Gross Profit: 3.79
• Enterprise Value/Ebitda: 5.20
• 1Y Price Target: $6.24
• Price Target Upside: 27.09% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 17

• Rating: 58 Neutral
• Price Target: $5.00 ▲(1.83%Upside)

Coty's overall stock score reflects a complex mix of financial and operational challenges. Strong gross margins provide a foundation, but negative net income and challenging valuation metrics weigh heavily. Technical indicators suggest potential rebound opportunities, but current momentum is weak. Strategic initiatives and growth in specific sectors offer longer-term promise, yet market pressures and tariff impacts create immediate headwinds.

Positive Factors

Analyst Confidence

Analyst's recommendation to upgrade to Buy indicates confidence in COTY's potential for value growth.

Debt Management

Progress on debt deleverage over the last several years and the potential for value unlock from the sale of its Wella stake contribute to a positive outlook.

Shareholder Value

COTY splitting up could unlock meaningful shareholder value.

Negative Factors

Leverage Concerns

COTY's ability to meet its goal of deleveraging to ~2.5x by the end of 2025 could be in question.

Market Challenges

The challenging macroeconomic backdrop adds uncertainty to the broader operating environment for beauty, especially discretionary products like prestige fragrances.

Sales Performance

Coty has been beaten down and is seeing sales slow and turn negative across both its prestige and consumer portfolio.

Coty Business Overview & Revenue Model

Company Description

Coty Inc. is a global beauty company that develops, manufactures, markets, and distributes a wide range of beauty products. The company operates in two main segments: Consumer Beauty and Prestige. Coty's product offerings include cosmetics, skincare, fragrances, and hair color, with a portfolio that features well-known brands such as CoverGirl, Rimmel, Sally Hansen, and Max Factor in the Consumer Beauty segment, and luxury brands like Gucci, Hugo Boss, and Burberry in the Prestige segment.

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
EBITDA	288.30M	849.10M	964.70M	856.30M	603.60M	-531.70M
Net Income	-396.00M	89.40M	508.20M	259.50M	-67.80M	-1.09B
Balance Sheet
Total Assets	11.47B	12.08B	12.66B	12.12B	13.69B	16.73B
Cash, Cash Equivalents and Short-Term Investments	243.50M	300.80M	246.90M	233.30M	253.50M	308.30M
Total Debt	4.09B	4.26B	4.48B	4.71B	5.69B	8.40B
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: 4.91
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• 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 4.91 is above the 20-day moving average (MA) of 4.87, below the 50-day MA of 4.92, and below the 200-day MA of 6.50, indicating a neutral trend. The MACD of -0.07 indicates Positive momentum. The RSI at 52.11 is Neutral, neither overbought nor oversold. The STOCH value of 30.70 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	$4.32B	26.12	22.16%	2.44%	10.32%	18.55%
ELF	75 Outperform	$7.12B	64.80	15.97%	―	28.28%	-14.79%
HELE	69 Neutral	$713.22M	5.75	7.45%	―	-4.93%	-23.61%
Sector *	66 Neutral	£1.86B	11.42	6.20%	3.06%	0.61%	-17.57%
EPC	65 Neutral	$1.09B	13.57	5.53%	2.58%	-2.11%	-28.79%
EL	61 Neutral	$30.62B	147.29	-17.27%	1.73%	-3.70%	-235.59%
COTY	58 Neutral	$4.28B	40.12	-10.58%	―	-1.68%	-302.11%

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.