Solo Brands (DTC) and recent bumpHi all,
I was just wondering, if anyone has an opinion on Solo Brands (DTC) as the stock fell sharply during last week. This was due to that expected earnings for Q4 were rather disappointing. The company has also appointed a new CEO and while recent news raise some uncertainty, I still like the long-term outlook for the company and think that the recent share price offers an opportunity.
I am curious if I am missing out on something, so please share you thoughts.
Have a great weekend,
Tom
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I’ve never really gotten a handle on whether they’ll be able to grow their niche products into a larger company (mostly Solo stoves, but also their folding kayaks and paddle boards), and whether they can keep their brand integrity and brand value as copycats begin to take up space in that niche. Sounds like they had a tough fourth quarter, despite some help from Snoop Dogg, but they don’t seem to have the same product extension ability and the same perceived brand quality as the Yeti folks… which is probably why the stock is so much cheaper (YETI is at ~16X forward earnings, DTC at ~4X). Both were COVID darlings that fell on hard times when Americans went back to being more “indoorsy” post-pandemic, and I don’t think I have a good enough handle on how much these kinds of brands should be worth to want to bet on them at this point… my impression is that even the enduring brands of outdoor life over the past few decades, like Coleman, don’t generally change hands at big premium prices or show great growth.
Hi Travis, First of all huge thanks for taking the time to reflect on the topic. Your insights and structured way of analyzing stocks is something I aim to learn. In the meantime, I just keep enjoying your articles.
I am living in Europe, so in some cases I have no information other than the “metrics” and info that can be found online(this is an example). Strange thing that sometimes this is a blessing and helps me making more unbiased decisions. Unfortunately, in many cases it also brings disappointment when the stock cannot be bought(or at least not on accounts where it makes sense).
Anyway, I really enjoy your work and I am super happy that I found your site.
Have a great a day!
Tom
Thanks Tom! Glad to have you with us.