Culp Story

<div class='circular--portrait' style='background:#FF6600;color: #FFFAFA;font-size:3em;'>CUL</div>
CULP -- USA Stock  

USD 12.35  0.22  1.75%

As many baby boomers are still indifferent towards consumer cyclical space, it makes sense to recap Culp Inc. We will try to explain if it is still possible for Culp to generate above-average margins. Is current the firm value sustainable? We will go over Culp Inc valuation drivers to give you a better outlook on taking a position in it.
Published over three weeks ago
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Is Culp (NYSE:CULP) ready for a correction?
Culp Inc currently holds 42.19 M in liabilities with Debt to Equity (D/E) ratio of 0.33, which is about average as compared to similar companies. The entity has a current ratio of 3.7, suggesting that it is liquid enough and is able to pay its financial obligations when due. Our trade advice tool can cross-verify current analyst consensus on Culp Inc and to analyze the company potential to grow in the current economic cycle.
We determine the current worth of Culp Inc using both absolute as well as relative valuation methodologies to arrive at its intrinsic value. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of Culp Inc based exclusively on its fundamental and basic technical indicators. By analyzing Culp's financials, quarterly and monthly indicators, and related drivers such as dividends, operating cash flow, and various types of growth rates, we attempt to find the most accurate representation of Culp's intrinsic value. In some cases, mostly for established, large-cap companies, we also incorporate more traditional valuation methods such as dividend discount, discounted cash flow, or asset-based models. As compared to an absolute model, our relative valuation model uses a comparative analysis of Culp. We calculate exposure to Culp's market risk, different technical and fundamental indicators, relevant financial multiples and ratios, and then comparing them to Culp's related companies.

Culp Inc Investment Alerts

Culp investment alerts and warnings help investors to get more proficient at understanding not only critical technical and fundamental signals but also the significant portfolio-centered indicators. These indicators include beta, alpha, and other risk-related measures that will help you in monitoring Culp Inc performance across your portfolios.Please check all investment alerts for Culp

Culp Valuation Ratios as Compared to Competition

Our valuation model uses many indicators to compare Culp value to that of its competitors to determine the firm's financial worth. You can analyze the relationship between different fundamental ratios across Culp competition to find correlations between indicators driving the intrinsic value of Culp.

How Culp utilizes its cash?

To perform a cash flow analysis of Culp, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Culp is receiving and how much cash it distributes out in a given period. The Culp cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities. Culp Net Cash Flow from Operations is very stable at the moment as compared to the past year. Culp reported last year Net Cash Flow from Operations of 4.97 Million

Breaking down Culp Indicators

The firm reported the previous year's revenue of 256.17 M. Net Loss for the year was (11.16 M) with profit before overhead, payroll, taxes, and interest of 40.5 M.
 2010 2011 2016 2020 (projected)
Receivables20.21 M23.48 M25.09 M26.14 M
Inventories28.72 M46.53 M47.91 M52.31 M

Margins Breakdown

Culp profit margins show the degree to which it makes money. Margin indicators are used not only by investors but also by creditors or Culp itself as indicators of financial health and management effectiveness. Please look more closely at the different varieties of Culp profit margins.
Operating Margin3.56
EBITDA Margin0.0284
Gross Margin0.2
Profit Margin(0.0211)

Culp Net Income Per Employee is very stable at the moment. Culp Revenue Per Employee is very stable at the moment. Furthermore, Culp Average Assets is very stable at the moment. Culp Net Income Per Employee is decreasing over the last 4 years. The previous year's value of Culp Net Income Per Employee was 15.26. Culp Revenue Per Employee is very stable at the moment. Furthermore, Culp Average Assets is increasing over the last 4 years.

Over 3 percent roll up for Culp. What does it mean for insiders?

The risk adjusted performance is down to 0.29 as of today. Culp Inc shows above-average downside volatility for the selected time horizon. We advise investors to inspect Culp Inc further and ensure that all market timing and asset allocation strategies are consistent with the estimation of Culp future alpha.

The Bottom Line

Although other entities within the textile manufacturing industry are still a little expensive, even after the recent corrections, Culp may offer a potential longer-term growth to insiders. While some insiders may not share our view we believe it may be a good time to drop Culp as the risk-reward trade off is not appealing enough to hold a position. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Culp.

About Contributor

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Raphi Shpitalnik do not own shares of Culp Inc. Please refer to our Terms of Use for any information regarding our disclosure principles.

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