Is Zumiez (USA Stocks:ZUMZ) having difficulty to pay out its debt?

ZUMZ Stock  USD 28.08  0.12  0.43%   
Zumiez Inc is scheduled to announce its earnings today. Zumiez Share Based Compensation is fairly stable at the moment as compared to the past year. Zumiez reported Share Based Compensation of 5.55 Million in 2021. Assets Non Current is likely to rise to about 214.5 M in 2022, whereas Average Assets are likely to drop slightly above 359.1 M in 2022. As many millenniums are trying to avoid specialty retail space, it makes sense to break down Zumiez Inc a little further and try to understand its current market patterns. We will evaluate why recent Zumiez price moves suggest a bounce in January.
Published over two months ago
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Zumiez Inc currently holds 263.48 M in liabilities with Debt to Equity (D/E) ratio of 0.7, which is about average as compared to similar companies.
Our trade advice module complements current analysts and expert consensus on Zumiez Inc. It analyzes the entity potential to grow using all fundamental, technical, and market related data available at the time.
Zumiez financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Zumiez, including all of Zumiez's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Zumiez assets, the company is considered highly leveraged. Understanding the composition and structure of overall Zumiez debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business is and if it is worth investing in it.
Please read more on our technical analysis page.

Understanding Zumiez Total Debt

Zumiez Inc liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. Zumiez Inc has to fulfill its short-term liabilities in this reporting year and should be no more than 12 months old. Long-term debt, on the other hand, is anything beyond the 12-month payment timeframe. Common short-term liabilities found on Zumiez balance sheet include debt obligations and money owed to different Zumiez vendors, workers, and loan providers. Below is the chart of Zumiez main long-term debt accounts currently reported on its balance sheet.
You can use Zumiez Inc financial leverage analysis tool to get a better grip on understanding its financial position

How important is Zumiez's Liquidity

Zumiez financial leverage refers to using borrowed capital as a funding source to finance Zumiez Inc ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Zumiez financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between Zumiez's total debt and its cash.

Exercise or conversion by Adam Ellis of 3875 shares of Zumiez subject to Rule 16b-3

Legal trades by Zumiez insiders are very common, as founders, directors, or employees of any publicly traded firm often have stock or stock options. These trades are made public in the United States through the filing of Form 4 of the Securities and Exchange Commission. Below entry was recorded recently and is publicly available as an insider trade:
Zumiez insider trading alert for exercise of restricted stock units by Adam Ellis, President International, on 16th of June 2022. This event was filed by Zumiez Inc with SEC on 2022-06-16. Statement of changes in beneficial ownership - SEC Form 4 [view details]   
Note, although insider trading is legal, in the United States, Canada, Australia, and Germany, for mandatory reporting purposes, corporate insiders are defined as a company's officers, directors, and any beneficial owners of more than 10% of a class of the company's equity securities.

Breaking it down

Zumiez Inc price slide over the last few months may raise some interest from investors as it is trading at a share price of 21.83 on 1,028,793 in trading volume. The company executives were not very successful in positioning the company resources to exploit market volatility in November. However, diversifying your holdings with Zumiez Inc or similar stocks can still protect your portfolio during high-volatility market scenarios. The stock standard deviation of daily returns for 90 days investing horizon is currently 3.71. The above-average risk is mostly attributed to market volatility and speculations regarding some of the upcoming earning calls from Zumiez Inc partners.

Asset Breakdown

214.5 M
Assets Non Current
382.8 M
Current Assets
Total Assets713.54 Million
Current Assets382.85 Million
Assets Non Current214.51 Million
Goodwill66.92 Million
Tax Assets7.51 Million

Time to drop of Zumiez?

Current Market Risk Adjusted Performance is up to -0.1. Price may slide again. Zumiez Inc exhibits very low volatility with skewness of 0.24 and kurtosis of 3.75. However, we advise investors to further study Zumiez Inc technical indicators to ensure that all market info is available and is reliable. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Zumiez's stock risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact Zumiez's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

Our Final Take On Zumiez

While some firms in the apparel retail industry are either recovering or due for a correction, Zumiez may not be as strong as the others in terms of longer-term growth potentials. With an impartial outlook on the current market volatility, it may be better to hold off any inventment activity and neither take up nor drop any shares of Zumiez at this time. The Zumiez Inc risk-reward trade off is not appealing enough to do any trading. 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 Zumiez.

Editorial Staff

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 Rifka Kats do not own shares of Zumiez Inc. Please refer to our Terms of Use for any information regarding our disclosure principles.

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