Is Canada Goose Holdings Inc. Right for Your Nest Egg at These Levels?

Canada Goose Holdings Inc. (TSX:GOOS)(NYSE:GOOS) is a wonderful growth stock, but is it too pricey at current levels?

| More on:

Canada Goose Holdings Inc. (TSX:GOOS) has arguably been one of the most promising Canadian growth IPOs in recent memory. The company has a ridiculously strong brand that has built a reputation for itself many years prior to going public. And unlike most other firms with strong, exclusive brands, Canada Goose hasn’t really needed to spend cash hand over fist on marketing initiatives to become a staple for consumers of conspicuous goods.

Increasing brand awareness remains one of the company’s top priorities. The most remarkable aspect of the company’s growth story is the fact that it has controlled its spending and has not loosened its purse strings to cover excessive ad expenses, like many other firms in its position would have. Canada Goose, once a firm that was anti-brand and anti-logo, now has one of the most recognizable logos in the fashion industry, which has allowed the company to command sky-high margins across its line-up of luxury outerwear items.

The iconic logo is now a status symbol thanks in part to the company’s growing role in the film industry. Over the years, Canada Goose has essentially become the unofficial outerwear brand of choice by film crews and some of the hottest stars.

Many consumers looking for a new pricey parka have been influenced by what their favourite stars have been wearing on various film sets in chilly locations. Daniel Craig wore the Canada Goose jacket proudly on the set of the last Bond film, Spectre, and anybody who viewed the well-publicized set photos may feel inclined to open their wallets a little wider to be able to dress like the much-idolized Bond. James Bond.

Canada Goose’s sponsorship of two major film festivals in Sundance and Toronto International Film Festival are ridiculously smart ways to promote its brand without breaking the bank. Dani Reiss is all about rampant growth in the most efficient way possible, making the stock a must-own for long-term shareholders seeking above-average EPS growth over the next five years.

Is the stock a buy today?

Canada Goose is definitely poised to be an earnings-growth king over the long haul. The company is putting its foot to the pedal on top-line growth initiatives, while simultaneously investing in margin-growth initiatives.

Although the growth ceiling is high, the stock is definitely not cheap, trading at over 83 times trailing earnings. Although it’s a compelling way to grow your nest egg over the long term, I’d recommend just adding the stock to your radar for now, as you wait for a more reasonable entry point that may present itself over the next few months.

Stay hungry. Stay Foolish.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Joey Frenette has no position in any of the stocks mentioned.

More on Investing

dividends grow over time
Dividend Stocks

1 Magnificent Dividend Stock That’s Down 10% and Trading at a Once-in-a-Decade Valuation

This dividend stock may be down around 10%, but there is a huge future opportunity for those wanting growth as…

Read more »

Canada national flag waving in wind on clear day
Dividend Stocks

RRSP Must-Haves: 2 Canadian Stocks to Secure Your Future

The TSX’s dividend pioneer and first Dividend King are must-haves in an RRSP to ensure financial security in retirement.

Read more »

stock research, analyze data
Dividend Stocks

How Much to Invest to Get $500 in Dividends Every Month

TSX dividend stocks such as Enbridge, TD Bank, and Telus, can help you earn $500 in monthly dividend payments.

Read more »

A solar cell panel generates power in a country mountain landscape.
Energy Stocks

Clean Energy Play: Is Brookfield Renewable a Good Stock for a TFSA?

Add this top renewable energy stock to your self-directed TFSA portfolio for significant long-term and tax-free wealth growth.

Read more »

Golden crown on a red velvet background
Dividend Stocks

Dividend Powerhouses: Canadian Stocks to Fuel Your Portfolio

These two top Canadian dividend aristocrats are some of the top stocks on the TSX to buy now and hold…

Read more »

Dial moving from 4G to 5G
Dividend Stocks

This Undervalued Dividend Stock is Worth Buying Right Now

Want an undervalued dividend stock with long-term potential and a juicy yield? Here's an option you may regret not buying…

Read more »

A worker gives a business presentation.
Dividend Stocks

1 Stock I’m Buying Hand Over Fist in July Despite the Market’s Pessimism

This top dividend stock is going through a rough patch, but don't let that count out all the growth we've…

Read more »

financial freedom sign

2 Stocks With Millionaire-Maker Potential

These two top Canadian stocks are among the best on the TSX, and each has the potential to be millionaire-maker…

Read more »