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Prada Spa ADR (PRDSY)
:PRDSY

Prada (PRDSY) AI Stock Analysis

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Prada

(OTC:PRDSY)

Rating:76Outperform
Price Target:
$15.00
â–²(17.92%Upside)
Prada's overall stock score is driven by strong financial performance and positive earnings call outcomes, with significant contributions from robust profitability and strategic brand initiatives. While technical indicators and valuation are less favorable, they are balanced by the company's growth prospects and operational strengths.

Prada (PRDSY) vs. SPDR S&P 500 ETF (SPY)

Prada Business Overview & Revenue Model

Company DescriptionPrada S.p.A., together with its subsidiaries, designs, produces, and distributes leather goods, handbags, footwear, apparel, and accessories in Europe, the Americas, the Asia Pacific, Japan, the Middle East, and Africa. It offers its products under the Prada, Miu Miu, Church's, and Car Shoe brands. The company also provides eyewear and fragrances under licensing agreements, as well as operates in the food sector under the Marchesi 1824 brand. As of December 31, 2021, it had 635 directly operated stores. The company also sells its products through a network of approximately 26 franchise operated stores; multi-brand stores; luxury department stores; independent retailers; and online retailers. In addition, it engages in the event management and real estate business, as well as operates duty-free stores. The company was founded in 1913 and is headquartered in Milan, Italy. Prada S.p.A. is a subsidiary of Prada Holding S.p.A.
How the Company Makes MoneyPrada makes money primarily through the design, production, and sale of luxury fashion goods. The company's revenue streams include retail sales from its directly operated stores, wholesale distribution to high-end department stores and specialty boutiques, and e-commerce sales through its website and third-party platforms. Prada also generates income from licensing agreements, where it authorizes other companies to produce and sell products under its brand name. Significant factors contributing to its earnings include its strong brand recognition, innovative product design, and strategic location of retail outlets in major fashion capitals and affluent markets. Additionally, Prada benefits from its vertically integrated business model, which allows for greater control over production, quality, and distribution.

Prada Earnings Call Summary

Earnings Call Date:Apr 30, 2025
(Q1-2025)
|
% Change Since: 2.25%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Positive
The earnings call reflects a positive overall performance with strong retail growth and successful brand initiatives. However, challenges remain due to market volatility and difficult comparisons in key regions like China and Japan.
Q1-2025 Updates
Positive Updates
Strong Retail Growth
Prada Group recorded a 13% increase in retail sales at constant FX, driven by like-for-like and full-price sales.
Miu Miu's Remarkable Performance
Miu Miu achieved a 60% growth at constant FX, with a significant increase in brand contribution to group retail sales from 22% to 31% compared to fiscal year 2024.
Geographical Sales Growth
The group saw robust growth across all regions, with the Middle East leading at 26% growth, followed by Japan at 18%, Europe at 14%, and the Americas at 10%.
Innovative Brand Initiatives
Prada and Miu Miu both launched unique projects such as Prada's cultural landmarks in Shanghai and Miu Miu's Custom Studio, which were well received.
Negative Updates
Market Volatility
The overall market environment remains challenging and unstable, with irregular trends making it difficult to predict future performance.
Chinese Market Volatility
Prada experienced volatility in the Chinese market, with a negative trend in Q1 2025 compared to the positive double-digit growth of Q1 2024.
Complex Comparisons in Japan
Japan's growth is expected to moderate due to difficult comparisons with the extraordinary growth witnessed in the first half of 2024.
Company Guidance
During the Prada Group's First Quarter 2025 Revenue Update call, the company reported net revenues of €1.34 billion, marking a 13% increase at constant exchange rates compared to the previous year. Retail sales reached €1.22 billion, driven by like-for-like and full-price sales, also up 13%. The wholesale channel grew by 7%, while royalties increased by 13%, supported by eyewear and fragrances. By brand, Miu Miu showed a remarkable growth of 60% at constant exchange rates, increasing its contribution to group retail sales to 31% from 22% in 2024. Geographically, the Middle East led with a 26% increase in retail sales, while Japan saw an 18% rise, although it is expected to moderate. Europe and the Americas posted growths of 14% and 10%, respectively, and Asia Pacific saw a 10% increase despite challenging market conditions. The company emphasized its strategic investments in North America and store expansions while acknowledging the ongoing challenges in the market.

Prada Financial Statement Overview

Summary
Prada exhibits strong financial performance with high profitability margins and robust revenue growth. The balance sheet is stable with a favorable equity ratio and manageable debt levels, while cash flow management is effective. These factors contribute to a positive financial outlook, though the industry's capital intensity poses some risk.
Income Statement
85
Very Positive
Prada demonstrates strong profitability with a high gross profit margin at approximately 80% and a robust net profit margin improving from around 5.5% in 2023 to 15.4% in 2024. The company shows a healthy revenue growth trend of 14.9% from 2023 to 2024. EBIT and EBITDA margins are also strong, indicating efficient operational management. However, the company experienced slower growth in earlier years, which slightly tempers the overall score.
Balance Sheet
75
Positive
Prada maintains a balanced financial structure with a Debt-to-Equity ratio of 0.63, indicating manageable leverage. The equity ratio stands at around 51.4%, showing solid equity financing. The Return on Equity (ROE) is impressive at 19.1% for 2024, reflecting strong profitability relative to equity. Potential risks include rising debt levels and the industry’s requirement for substantial capital investments.
Cash Flow
80
Positive
Prada's cash flow position is healthy, with a significant increase in free cash flow from 2023 to 2024 by 201.3%, demonstrating improved cash generation capabilities. The Operating Cash Flow to Net Income ratio is strong, indicating effective conversion of profit into cash. The Free Cash Flow to Net Income ratio also shows efficient cash utilization, though past years had variations due to fluctuating capital expenditures.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
5.43B4.73B4.13B3.37B2.42B
Gross Profit
4.34B3.80B2.63B2.55B1.74B
EBIT
1.28B1.06B834.53M467.67M1.10M
EBITDA
2.01B1.73B1.42B1.09B648.73M
Net Income Common Stockholders
838.91M671.03M465.19M294.25M-54.14M
Balance SheetCash, Cash Equivalents and Short-Term Investments
1.01B689.52M1.09B981.79M442.39M
Total Assets
8.55B7.62B7.35B6.96B6.53B
Total Debt
2.79B2.60B2.65B2.79B2.89B
Net Debt
1.78B1.91B1.57B1.81B2.44B
Total Liabilities
4.13B3.74B3.86B3.83B3.68B
Stockholders Equity
4.40B3.86B3.47B3.11B2.83B
Cash FlowFree Cash Flow
1.19B395.61M868.84M923.90M482.86M
Operating Cash Flow
1.65B1.16B1.11B1.14B592.42M
Investing Cash Flow
-462.45M-759.19M-246.75M-137.26M-149.91M
Financing Cash Flow
-875.47M-775.73M-775.04M-494.73M-395.27M

Prada Technical Analysis

Technical Analysis Sentiment
Negative
Last Price12.72
Price Trends
50DMA
12.74
Negative
100DMA
14.32
Negative
200DMA
14.30
Negative
Market Momentum
MACD
-0.02
Positive
RSI
45.28
Neutral
STOCH
14.10
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PRDSY, the sentiment is Negative. The current price of 12.72 is below the 20-day moving average (MA) of 13.19, below the 50-day MA of 12.74, and below the 200-day MA of 14.30, indicating a bearish trend. The MACD of -0.02 indicates Positive momentum. The RSI at 45.28 is Neutral, neither overbought nor oversold. The STOCH value of 14.10 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PRDSY.

Prada Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
76
Outperform
$16.27B17.9320.60%1.56%14.98%25.10%
TPTPR
76
Outperform
$16.40B20.7740.27%1.77%2.67%1.31%
RLRL
76
Outperform
$16.58B23.6729.49%1.20%6.75%19.71%
ZGZGN
76
Outperform
$3.47B25.708.89%1.51%2.26%-37.52%
MTMTN
73
Outperform
$5.59B19.2530.55%5.90%2.38%6.01%
SCSCI
73
Outperform
$11.28B21.8332.71%1.54%2.40%4.07%
62
Neutral
$6.88B11.322.90%3.87%2.70%-24.57%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
PRDSY
Prada
12.78
-3.66
-22.26%
TPR
Tapestry
79.26
36.06
83.47%
RL
Ralph Lauren
270.32
85.01
45.87%
SCI
Service International
79.83
9.61
13.69%
MTN
Vail Resorts
155.68
-15.62
-9.12%
ZGN
Ermenegildo Zegna
8.64
-3.62
-29.53%
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.