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Kohl's - AI Stock Analysis

Analysis generated April 3, 2025

Kohl's Corporation (NYSE: KSS) is an American department store retail chain, operating primarily as a family-focused, value-oriented retailer. The company offers moderately priced private-label and national-brand apparel, footwear, accessories, beauty, and home products. As one of the largest department store chains in the United States, Kohl's maintains a significant presence in both physical retail locations and online sales. However, recent trends and financial performance highlight several challenges facing the organization.

Fundamental Analysis

The revenue for the last quarter was $3.63 billion, reflecting a decrease of 0.33% from the previous quarter and an 8.35% decline compared to the same quarter last year. This downward trend in revenue indicates a need for concern as it suggests potential issues with sales growth and market conditions.

Net income for the last quarter stood at $22 million, a decrease of 66.67% from the previous quarter and a 62.71% year-over-year decline. Such significant reduction in net income underscores profitability challenges the company is currently facing.

EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) for the last quarter was $282 million, which represents a 20.34% decrease from the previous quarter and a 3.42% drop compared to the previous year. The falling EBITDA signals weakening operational efficiency and profitability.

On a more positive note, the current Price to Earnings (P/E) ratio is 8.78, which is considered low and could indicate that the stock is undervalued. A low P/E ratio sometimes suggests a bullish outlook as it might represent an attractive investment opportunity relative to the company's earnings potential.

Technical Analysis

Today, Kohl's stock price is $6.64, a 40.50% decrease from a month ago and a 71.55% decline compared to a year ago. This steep drop in stock price is concerning and points to significant short-term and long-term challenges.

The trend remains bearish, with the current Simple Moving Average (SMA10) standing at 8.38, lower than the previous SMA10 of 8.66. This decline hints at continued downward price momentum.

The Relative Strength Index (RSI) is currently 25.4, suggesting that the stock may be oversold. An oversold condition can sometimes precede a bullish reversal if investors start perceiving the stock as undervalued and begin buying.

Alternative Data Analysis

Exploring job postings and employee sentiment, Kohl's has 1,995 open positions, a 103% increase in recent months, suggesting potential business growth and expansion, a positive sign given the current hiring environment.

However, employee sentiment is relatively low, with only 33% of employees having a positive business outlook. This figure has decreased by 6% over the last couple of months, reflecting growing internal concerns about the company's future.

In terms of customer acquisition, Kohl's website saw an estimated 41 million visitors, but this number has dropped by 54% recently. Similarly, the average daily downloads of Kohl's mobile app are down by 54%, both indicating potential customer loss.

Customer engagement data shows Kohl's has 1.5 million Instagram followers and 730,000 Twitter followers. Both metrics have remained relatively stable or slightly decreased, indicating static or eroding customer interest.

The AltIndex AI score, which predicts stock performance based on fundamental, technical, and alternative data, gives Kohl's a score of 34, which is a sell signal.

Conclusion

Overall, Kohl's Corporation faces multiple challenges on several fronts. Fundamental metrics such as revenue, net income, and EBITDA show unfavorable trends that signal deteriorating financial health. Technical analysis points to a bearish trend and oversold conditions, while alternative data reflects internal concerns and diminishing customer engagement. Although the low P/E ratio indicates potential undervaluation, the prevailing negative indicators suggest caution.

Therefore, given the current data, a recommendation might be to consider selling or holding off on buying Kohl's stock until there are clearer signs of recovery and improvement across these various dimensions.

Disclaimer: This AI stock analysis, generated by an experimental AI tool, is for informational purposes only and not financial advice. Information is based on publicly available data and may not always be accurate or current.