Skims, the clothing line co-founded in 2019, recently secured $270 million in its latest fundraising round, resulting in a company valuation of approximately $4 billion, as The New York Times reported on July 19. In four years, Skims has successfully raised $670 million.
Wellington Management, a company recognized for guiding firms through the process of going public, spearheaded the latest funding round. Additionally, Skims has appointed Andy Muir, formerly associated with Nike (NYSE: NKE), as its chief financial officer. The inclusion of a CFO is frequently indicative of an impending Initial Public Offering (IPO).
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Analyst opinion on Skims going public
Amid the possibility of this company going public, most investors have a positive sentiment simply because Kim Kardashian is the name behind it. Still, stock analyst Gurgavin Chandhoke, CEO and founder of uINVST, bases his arguments on the company’s strong fundamentals for potential strong stock performance.
In his post on X on November 28, he shared all the aspects contributing to his optimistic valuation of this asset.
As Gurgavin highlighted, the estimated net profit of $190 million in 2023 compared to current earnings suggests a potential for solid profitability growth. Investors often view companies with increasing profits favorably, especially if they believe the growth is sustainable.
In his analysis, Gurgavin also pointed out that the stock is trading at 21 times current earnings, which may be considered reasonable or undervalued depending on the industry and the company’s growth prospects. If comparable companies in the industry are trading at higher multiples, it could suggest that the stock has room for appreciation.
Therefore, in the case of potential Skims opening for public trading, it might present itself as an opportunity that investors should carefully consider.
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