Torrid Holdings Inc. (NYSE:CURV) shares have had a horrible month, losing 25% after a relatively good period beforehand. The good news is that in the last year, the stock has shone bright like a diamond, gaining 142%.
Although its price has dipped substantially, Torrid Holdings may still be sending very bearish signals at the moment with a price-to-earnings (or “P/E”) ratio of 51.8x, since almost half of all companies in the United States have P/E ratios under 17x and even P/E’s lower than 10x are not unusual. Nonetheless, we’d need to dig a little deeper to determine if there is a rational basis for the highly elevated P/E.
With earnings that are retreating more than the market’s of late, Torrid Holdings has been very sluggish. One possibility is that the P/E is high because investors think the company will turn things around completely and accelerate past most others in the market. You’d really hope so, otherwise…
