Coty Inc (COTY) Stock Analysis
Verdict: AVOID
Severely leveraged balance sheet and repeated earnings misses overshadow deep value multiples, creating a potential 'value trap' scenario.
Investment score: 38/100
Analysis as of
Is Coty Inc stock worth reviewing? The TradeMates thesis
Coty is facing a liquidity and credibility crisis. Despite owning iconic brands, the 2025-2026 earnings trend shows massive misses (-1100% surprise in most recent report) and a debt-to-equity ratio of 1.15 that understates the strain on EBITDA. The 18.2% FCF yield is the only bullish signal, but it is likely to be consumed by debt servicing.
7-factor investment score
- Valuation: 45/100 (weight 20%)
- Financial Health: 20/100 (weight 15%)
- Technical Momentum: 15/100 (weight 15%)
- Earnings Quality: 10/100 (weight 15%)
- Insider Sentiment: 65/100 (weight 10%)
- Analyst Consensus: 40/100 (weight 10%)
- Risk-Adjusted Return: 30/100 (weight 15%)
Coty Inc opportunities and risks
What speaks for COTY
- High FCF Yield of 18.2%
What speaks against COTY
- Liquidity Crunch and Debt Covenants
Peers and competitors
| Ticker | P/E | P/S | EV/EBITDA | Gross margin | Net margin | FCF yield |
|---|---|---|---|---|---|---|
| COTY | n/a | 0.3x | 49.7x | 60.7% | -9.2% | 18.2% |
| KVUE | 21.1x | 2.3x | 13.3x | 58.4% | 10.6% | 5.3% |
| EL | n/a | 2.1x | 27.7x | 73.4% | -1.7% | 4.1% |
| ELF | 140.9x | 2.3x | 27.1x | 70.7% | 1.6% | 5.1% |
| BRBR | 7.5x | 0.5x | 7.4x | 28.9% | 6.8% | 16.2% |
| IPAR | 18.6x | 2.1x | 10.6x | 64.0% | 11.3% | 6.3% |
| Peer median | 18.6x | 2.1x | 13.3x | 64.0% | 6.8% | 5.3% |
Frequently asked questions about Coty Inc (COTY)
Is COTY stock a good investment?
The TradeMates model rates Coty Inc as AVOID with an investment score of 38/100. Coty is facing a liquidity and credibility crisis. Despite owning iconic brands, the 2025-2026 earnings trend shows massive misses (-1100% surprise in most recent report) and a debt-to-equity ratio of 1.15 that understates the strain on EBITDA. The 18.2% FCF yield is the only bullish signal, but it is likely to be consumed by debt servicing. This is algorithmic model output, not personal investment advice.
Is COTY stock a buy?
The TradeMates model verdict for COTY is AVOID with an investment score of 38/100. Treat this as a model signal to review, not a personal buy recommendation.