Q: What are your thoughts on Aritzia at these levels and what would cause such a drop in value that is significantly greater than the market sell off in general.
5i Research Answer:
ATZ is viewed as a 'growth' company and as such has a higher-than-average valuation (27X earnings). Any growth hiccup would likely hurt the stock more than the market. Its last problem was high inventory (fixed now). In fashion, inventory is an issue because too much means price discounts, but discounts also hurt the 'brand'. ATZ has had good success in the US so far, but a problem there would also likely scare investors off the stock.