Bargain Buy or Risky Bet? Bath & Body Works Slides to 52-Week Low

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Over on Nasdaq, 180 hit new 52-week highs compared to 139 hitting new 52-week lows.One of 50 NYSE stocks hitting a new 52-week low was Bath & Body Works (BBWI), a one-time superstar stock. In November 2021, during COVID, the specialty retailer’s stock hit a 20-year high at $82. Four years later, it trades at one-quarter that.AMD Short Strangle Could Net $1400 in a Few WeeksI’m Preparing for a ‘Bang’ When the Nasdaq Crashes. Here’s How I’m Trading the QQQ ETF First.Amazon Just Ditched Its Stake in IonQ Stock. Should You Bail on the Quantum Computing Leader Too?Stop Missing Market Moves: Get the FREE Barchart Brief – your midday dose of stock movers, trending sectors, and actionable trade ideas, delivered right to your inbox. Sign Up Now!Yesterday, the seller of body soap, body lotions, fragrant candles, and other home items hit its 25th new 52-week low in the past 12 months. As a result, BBWI stock is down over 30% in the past year.With so many expensive stocks these days, a stock trading for one-quarter of its past market cap would garner attention from value investors. However, you could also make the argument that there are reasons the stock continues to lose ground, making a potential buy less than a sure thing.Is Bath & Body Works a bargain buy or risky bet? I’ll look at both sides of the argument.Whenever I consider a potential value buy, I like to look back at a time when its shares were highly valued — in this case, November 2021.As I mentioned in the introduction, it hit a 20-year high of $82 four years ago this month. That would have valued Bath & Body Works’ equity at $21.13 billion based on 257.7 million shares outstanding. Add in $2.88 billion in net debt for an enterprise value of $24.01 billion.In fiscal 2021 (year-end Jan. 31, 2022), it had sales of $7.88 billion, 23% and 46% higher than in 2020 and 2019, respectively. Its net income in 2021 was $1.33 billion, or $4.88 a share.So, its shares were valued at 16.8 times its earnings in November 2021. Seems reasonable for double-digit growth on the top and bottom lines.However, nearly 20% of the earnings were from discontinued operations -- it completed the tax-free spin-off of Victoria’s Secret in August 2021 -- so the actual P/E multiple was 20.8x based on its continued operations, which earned $3.94 a share.Still not obscene.As for price-to-sales, its market cap was 2.68 times its 2021 sales of $7.88 billion. Also not obscene. For comparison, Lululemon (LULU) shares were trading around $475 in November 2021, 179% above their current price. According to S&P Global Market Intelligence, LULU had P/E and P/S ratios of nearly 70x and 10x, respectively.Terms and Privacy PolicyPrivacy & Cookie SettingsMore InfoS&P Futures6,757.25 -2.75 (-0.04%)Dow Futures47,552.00 +5.00 (+0.01%)Nasdaq Futures25,061.25 -33.50 (-0.13%)Russell 2000 Futures2,390.60 +0.60 (+0.03%)VIX20.00 +2.49 (+14.22%)Gold4,201.50 +7.00 (+0.17%)PortfolioSign in to access your portfolioSign inTop gainersCLBT Cellebrite DI Ltd. 19.28 +3.31 (+20.73%)ONDS Ondas Holdings Inc. 6.56 +1.05 (+19.06%)FLY Firefly Aerospace Inc. 21.42 +3.11 (+16.99%)SEE Sealed Air Corporation 42.50 +6.12 (+16.82%)TTEK Tetra Tech, Inc. 37.41 +4.96 (+15.29%)Top losersBTDR Bitdeer Technologies Group 11.11 -2.83 (-20.30%)FRMI Fermi Inc. 17.50 -4.26 (-19.58%)BE Bloom Energy Corporation 103.55 -23.17 (-18.28%)FLNC Fluence Energy, Inc. 16.25 -2.96 (-15.41%)VIA Via Transportation, Inc. 43.14 -7.36 (-14.57%)Most activeONDS Ondas Holdings Inc. 6.56 +1.05 (+19.06%)OPEN Opendoor Technologies Inc. 8.56 -0.81 (-8.64%)NVDA NVIDIA Corporation 186.86 -6.94 (-3.58%)SOFI SoFi Technologies, Inc. 28.39 -3.82 (-11.86%)PLUG Plug Power Inc. 2.4900 -0.2400 (-8.79%)Earnings eventsMy earnings eventsEarnings eventsTrending tickersBTC-USD Bitcoin USD 98,275.12 -3,800.09 (-3.72%)TSLA Tesla, Inc. 401.99 -28.61 (-6.64%)ETH-USD Ethereum USD 3,192.27 -274.36 (-7.91%)AMAT Applied Materials, Inc. 223.23 -7.50 (-3.25%)COIN Coinbase Global, Inc. 283.14 -20.86 (-6.86%)Top economic events