Now Is Not The Time To Buy Guess Stock
Guess Stock (NYSE: GES) has seen its stock drop 35% in 2025, significantly underperforming the S&P 500’s 8% decline. This weakness is largely driven by challenges in the Americas segment, elevated inventory levels, and heavy markdowns—all of which have weighed on the company’s profitability. Broader market volatility, fueled by tariff policies under the Trump administration, and escalating trade tensions, has further pressured the stock. While the company’s acquisition of Rag & Bone is helping boost revenue, profits took a sharp hit during the holiday quarter.
Guess is reassessing its strategy in China, moving from direct operations toward a potential partnership with an experienced local firm. In North America, the company plans to close around 20 underperforming stores amid ongoing declines in foot traffic, part of a broader effort to streamline its retail footprint.
Despite its current trading price of around $10, Guess stock appears fundamentally unattractive. While the valuation may seem compelling at face value, deeper analysis reveals several red flags. We base our view on a comparative assessment of the company’s current valuation versus its historical operating performance and financial health. Our evaluation—guided by key metrics across Growth, Profitability, Financial Stability, and Downturn Resilience—suggests that the stock remains a bad pick at this time.
How does Guess’ valuation look vs. the S&P 500?
Going by what you pay per dollar of sales or profit, GES stock looks cheap compared to the broader market.
• Guess? has a price-to-sales (P/S) ratio of 0.2 vs. a figure of 2.8 for the S&P 500
How have Guess revenues grown over recent years?
Guess Revenues have seen modest growth over recent years.
• Guess? has seen its top line grow at an average rate of 4.9% over the last 3 years (vs. an increase of 6.2% for S&P 500)
• Its revenues have grown 7.9% from $2.8 Bil to $3.0 Bil in the last 12 months (vs. growth of 5.3% for S&P 500)
• Also, its quarterly revenues grew 4.6% to $932 Mil in the most recent quarter from $891 Mil a year ago (vs. 4.9% improvement for S&P 500)
How profitable is Guess?
Guess profit margins are much worse than most companies in the Trefis coverage universe.
• Guess?’s Operating Income over the last four quarters was $174 Mil, which represents a poor Operating Margin of 6.0% (vs. 13.1% for S&P 500)
Does Guess look financially stable?
The balance sheet looks weak.
• Guess’ Debt figure was $1.5 Bil at the end of the most recent quarter, while its market capitalization is $501 Mil (as of 4/15/2025). This implies a very poor Debt-to-Equity Ratio of 278.0% (vs. 21.5% for S&P 500). [Note: A lower Debt-to-Equity Ratio is desirable]
• Cash (including cash equivalents) makes up $188 Mil of the $2.8 Bil in Total Assets for Guess?. This yields a moderate Cash-to-Assets Ratio of 5.0% (vs. 15.0% for S&P 500)
How resilient is GES stock during a downturn?
GES stock has fared much worse than the benchmark S&P 500 index during some of the recent downturns. While investors have their fingers crossed for a soft landing by the U.S. economy, how bad can things get if there is another recession? Our dashboard How Low Can Stocks Go During A Market Crash captures how key stocks fared during and after the last six market crashes.
Inflation Shock (2022)
• GES stock fell 53.1% from a high of $30.79 on 27 May 2021 to $14.43 on 26 September 2022, vs. a peak-to-trough decline of 25.4% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 21 March 2024
• Since then, the stock has increased to a high of $33.40 on 1 April 2024 and currently trades at around $10
Covid Pandemic (2020)
• GES stock fell 83.3% from a high of $23.50 on 17 January 2020 to $3.92 on 18 March 2020, vs. a peak-to-trough decline of 33.9% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 8 January 2021
Putting all the pieces together: What it means for GES stock
In summary, GES performance across the parameters detailed above is as follows:
• Growth: Weak
• Profitability: Very Weak
• Financial Stability: Very Weak
• Downturn Resilience: Extremely Weak
• Overall: Very Weak
Hence, despite its very low valuation, we think that the stock is unattractive, which supports our conclusion that GES is a bad stock to buy.
While you would do well to avoid GES stock for now, you could explore the Trefis Reinforced Value (RV) Portfolio, which has outperformed its all-cap stocks benchmark (combination of the S&P 500, S&P mid-cap, and Russell 2000 benchmark indices) to produce strong returns for investors. Why is that? The quarterly rebalanced mix of large-, mid- and small-cap RV Portfolio stocks provided a responsive way to make the most of upbeat market conditions while limiting losses when markets head south, as detailed in RV Portfolio performance metrics.
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