Skechers (SKX) Is Considered a Good Investment by Brokers: Is That True?

Group 1: Analyst Recommendations - Skechers (SKX) has an average brokerage recommendation (ABR) of 1.25, indicating a consensus between Strong Buy and Buy, with 10 out of 12 recommendations being Strong Buy [1][2] - The ABR reflects that Strong Buy and Buy recommendations account for 83.3% and 8.3% of all recommendations, respectively [1] Group 2: Limitations of Brokerage Recommendations - Brokerage recommendations may not effectively guide investors towards stocks with the highest potential for price appreciation due to analysts' vested interests [2][3] - For every "Strong Sell" recommendation, brokerage firms tend to issue five "Strong Buy" recommendations, indicating a bias in their ratings [2][3] Group 3: Zacks Rank vs. ABR - Zacks Rank is a proprietary stock rating tool that categorizes stocks based on earnings estimate revisions, providing a more reliable indicator of future price performance compared to ABR [3][5] - The Zacks Rank is timely and reflects the latest earnings estimate revisions, while ABR may not always be up-to-date [5] Group 4: Earnings Estimates for Skechers - The Zacks Consensus Estimate for Skechers has increased by 0.2% over the past month to $4.08, indicating growing optimism among analysts regarding the company's earnings prospects [6] - The increase in the consensus estimate, along with other factors, has resulted in a Zacks Rank 2 (Buy) for Skechers, suggesting a positive outlook for the stock [6]