Torrid Stock Up 19% in a Month: Is it Time to Buy, Hold or Cash Out?

Core Insights - Torrid Holdings Inc. (CURV) has experienced a significant stock gain of 19.1% over the past month, outperforming the retail apparel industry's rise of 5.2% [1][2] - The company is recognized as a leader in plus-size fashion, demonstrating resilience and adaptability in a challenging retail environment [5][8] - Torrid's strategic focus on product evolution and digital capabilities positions it for long-term growth by targeting broader demographic segments [5][9] Performance Metrics - Torrid's stock closed at $4.16, which is 54.5% below its 52-week high of $9.14 reached on July 17, 2024 [6] - The stock has recently surpassed the 20-day moving average, indicating a bullish trend [6] Market Position - Torrid's dominance in the plus-size fashion market allows it to cater to an underserved segment, fostering deep brand loyalty [8] - The company's brand awareness has increased from the low 40% range last year to 52% [9] Strategic Initiatives - Torrid is transitioning into the second phase of its business transformation strategy, focusing on scaling the business and expanding product offerings [11] - The company plans to close 10 to 15 stores this year and an additional 20 to 25 by the end of fiscal 2024, which is expected to enhance adjusted EBITDA margins [16] Financial Outlook - Torrid's net sales for fiscal 2024 are projected to be between $1.135 billion and $1.145 billion, with adjusted EBITDA expected in the range of $110 million to $116 million [17] - The Zacks Consensus Estimate for earnings per share has seen upward revisions, indicating expected year-over-year growth rates of 81.8% and 55% for the current and next fiscal years, respectively [18] Valuation - Torrid is currently trading at a forward 12-month price-to-earnings (P/E) multiple of 14.45X, which is below the industry average of 16.92X and the S&P 500's average of 22.38X [20] - The stock is also trading below its median P/E level of 25.93 observed over the past year, suggesting it is attractively priced relative to peers and historical levels [20]