Party City Stock Beats Q2 Earnings, Should You Buy?

NYSE: PRTY | Party City Holdco Inc.  News, Ratings, and Charts

PRTY – Party City Holdco (PRTY) reported better-than-expected earnings in the last reported quarter. Despite its better-than-expected quarterly financials, the stock’s weak fundamentals are concerning. So, should you buy the stock just based on its earnings beat? Read on to learn our view….

Party City Holdco Inc. (PRTY) designs, manufactures, sources, and distributes party goods worldwide. The company operates through two segments, Retail and Wholesale. It offers paper and plastic tableware, metallic and latex balloons, Halloween and other costumes, accessories, novelties, gifts, and stationery.

PRTY’s $0.10 EPS in the second quarter surpassed the consensus estimate by 66.7%. However, the company’s revenue of $527.45 million came in marginally lower than the $529.40 million estimate.

PRTY’s stock has declined 63.9% in price year-to-date and 68.7% over the past year to close the last trading session at $2.01. It is currently trading 78.1% below its 52-week high of $9.21, which it hit on November 5, 2021.

Here’s what could influence the performance of PRTY in the upcoming months:

Disappointing Financials

PRTY’s net sales declined 1.5% year-over-year to $527.45 million for the second quarter ended June 30, 2022. Its adjusted EBITDA declined 46.6% year-over-year to $45.80 million. The company’s adjusted net income decreased 66.2% year-over-year to $11.50 million. Also, its adjusted EPS declined 65.5% year-over-year.

Mixed Analyst Estimates

PRTY’s EPS and revenue for fiscal 2022 are expected to decline 88.2% and 0.7% year-over-year to $0.08 and $2.16 billion, respectively. Its EPS and revenue for fiscal 2023 are expected to increase 425% and 2.7% year-over-year to $0.42 and $2.21 billion, respectively.

Mixed Profitability

In terms of trailing-12-month gross profit margin, PRTY’s 15.56% is 57.6% lower than the 36.70% industry average. Likewise, its 0.74% trailing-12-month asset turnover ratio is 28% lower than the industry average of 1.03%.

However, the stock’s trailing-12-month ROCE and Capex/Sales of 68.80% and 4.14% compare to the industry averages of 15.51% and 2.92%, respectively.

Mixed Valuation

In terms of forward P/B, PRTY’s 0.48x is 82.1% lower than the 2.68x industry average. Likewise, its 0.11x forward P/S is 88.7% lower than the 0.93x industry average.

However, the stock’s 1.19x forward EV/S is 1% higher than the 1.18x industry average. Also, its 14.64x forward EV/EBITDA is 62.2% higher than the 9.02x industry average.

POWR Ratings Reflect Bleak Prospects

PRTY has an overall D rating, equating to Sell in our POWR Ratings system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.

Our proprietary rating system also evaluates each stock based on eight distinct categories. PRTY has an F grade for Stability, in sync with its 3.12 beta.

It has a C grade for Quality, consistent with its mixed profitability.

PRTY is ranked #37 out of 46 stocks in the Specialty Retailers industry. Click here to access PRTY’s ratings for Growth, Value, Momentum, and Sentiment.

Bottom Line

Despite surpassing the consensus earnings estimate in the last reported quarter, PRTY is best avoided now, given its weak fundamentals and growth prospects.

How Does Party City Holdco Inc. (PRTY) Stack Up Against Its Peers?

PRTY has an overall POWR Rating of D, equating to a Sell. Therefore, one might want to consider investing in other Specialty Retailers stocks with an A (Strong Buy) or B (Buy) rating, such as TravelCenters of America Inc. (TA), Murphy USA Inc. (MUSA), and The ODP Corporation (ODP).

Want More Great Investing Ideas?

3 Stocks to DOUBLE This Year


PRTY shares were trading at $2.05 per share on Wednesday morning, up $0.04 (+1.99%). Year-to-date, PRTY has declined -63.20%, versus a -12.10% rise in the benchmark S&P 500 index during the same period.


About the Author: Dipanjan Banchur


Since he was in grade school, Dipanjan was interested in the stock market. This led to him obtaining a master’s degree in Finance and Accounting. Currently, as an investment analyst and financial journalist, Dipanjan has a strong interest in reading and analyzing emerging trends in financial markets. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
PRTYGet RatingGet RatingGet Rating
TAGet RatingGet RatingGet Rating
MUSAGet RatingGet RatingGet Rating
ODPGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


Investors: Are You Ready for November?

The S&P 500 (SPY) tumbled to end October. Is that a harbinger of more downside to come? Or will the bull market return with gusto? Investment pro Steve Reitmeister shares his time market views including a preview of his favorite stocks. Get the full story below...

3 Cybersecurity Stocks Defending Against Digital Threats

The demand for cybersecurity solutions is rising as digital threats and sophisticated cyberattacks continue to escalate. Therefore, it might be wise to keep track of cybersecurity stocks, CrowdStrike (CRWD), Palo Alto Networks (PANW), and Fortinet (FTNT), as they offer innovative solutions presenting further growth opportunities. Continue reading...

3 Oil Stocks With High Upside as Global Demand Rebounds

The outlook for oil demand growth appears promising despite economic uncertainties and worldwide supply deficit. Amid this, investing in quality oil stocks Enterprise Products Partners (EPD), Marathon Oil (MRO), and Plains All American Pipeline (PAA) could be ideal as global demand rebounds. Read more...

3 Tech Stocks Under $10 That Could Deliver Big Gains

The technology industry is booming, driven by breakthroughs and significant government investments. Thus, incorporating affordable tech stocks, Sprinklr (CXM), Sabre Corporation (SABR), and Cricut (CRCT) into your portfolio provides an accessible entry point to capitalize on the industry’s growth. Read more…

2 Concerns for Investors in October

The S&P 500 (SPY) may be touching all time highs...but recent action points to concerns on 2 fronts: inflation and earnings. Investment veteran Steve Reitmeister shares his views on these 2 timely topics along with a preview of his top stocks to buy now.

Read More Stories

More Party City Holdco Inc. (PRTY) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All PRTY News