Entering text into the input field will update the search result below

Rocky Brands: Net Income +344%, Double-Digit Sales Growth Guidance And 86% Upside

May 05, 2021 4:08 PM ETRocky Brands, Inc. (RCKY) Stock17 Comments


  • Strong 1Q21 earnings with adjusted net income up 344.1% YoY.
  • Robust demand and revenue growth that is expected to continue in 2021.
  • Adjusted gross margins improved 410bps YoY.
  • Honeywell footwear brands acquisition closed in March.
  • Stock up 169% since our initial recommendation in August 2020 and we still expect an upside of 86%.

hiking feet mountain peak rock
Photo by lzf/iStock via Getty Images

Strong 1Q21 Earnings

Stock up 16.5% on intra-day trading because of strong earnings.

Rocky Brands (NASDAQ:RCKY) reported an excellent set of first quarter 2021 financials with revenues up 57.3% YoY


This article was written by

Value Investment Principals [VIP] has a 12-year track record, starting in 2009, focusing on unique under-covered stocks. Our typical ideas have zero/limited research coverage, “deep-value”, growth, high cash and FCF [Free Cash Flow]. We search for High Dividend Yields to appeal to retail clients, creating a steady source of income. We have a strong track record of performance for both large institutional and High Net-Worth Individuals [HNIs].Approximately 2/3 of our ideas have been in growth industries (with earnings growth of more than 2x the GDP growth rate). Our deep-value ideas all have multiple catalysts that are likely to unfold over the next 6-12 months to unlock value. We offer 10+ page research reports with detailed IS/BS/CF forecasts, rigorous ratio analysis and Discounted Cash Flow valuations alongside price targets on all recommendations. Our team consists of 3 highly skilled analysts with Masters degrees and extensive industry experience. Bottom-line, all of our ideas have been ignored by Wall Street analysts, and this creates opportunity in undervalued, under followed stocks with high dividend yields and growth.Sandy Mehta, CFA, our founder and Director, has over 30-years’ experience as a PM of a 5-Star award-winning small-cap fund as well as a flagship $15 billion Global Equity Fund. Sandy also founded Acumen Capital Management in 2004, and incubated a global long-short $200 million Hedge Fund. In 2015, he founded equity research firm Evaluate Research, his third entrepreneurial venture in global financial services, focusing on unfollowed equities. He has an MBA degree [Director’s List Honors] from the Wharton School, and a Master of International Management [with Honors] from the American Graduate School of International Management. He attained his CFA at the age of 25.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

Comments (17)

rjm22 profile picture
--Baird Adjusts Rocky Brands PT to $65 From $40, Maintains Neutral Rating
MT NEWSWIRES 8:34 AM ET 6/14/2021
TLCVI profile picture
14 Jun. 2021
Possible Questions for RCKY’s Approximate 71 Stockholders to Consider and/or Raise with Management:
1. Could the Company provide more details as to the “limited number of suppliers for key production materials” [5, 6, 7, 9, 11, 13, 15, 17, 19, 21, 23]?
2. On account of the Company saying a loss of a key customer could have a material adverse effect on the financials, could the Company say what percentages of sales their largest customers account for? If possible could they also reveal their identities?
3. Does the Company have any operating loss carryforwards at present and if so what is their value and when are they due to start expiring?
4. What legal proceedings if any has the Company been a part of in the latest fiscal decade?
5. Was the selling of the Creative Recreation brand linked to the Business’ loss the previous fiscal year?
6. What are the “other assets” listed on RKCY’s latest balance sheet?
7. “In early 2018, the Washington and Canada logistics operations were wound down and closed” [9]. Did this not result in any impairment, reorganizational or other charges? And if it did, what was their value?
8. How long is the Company expecting to take to reach a new agreement on the Puerto Rico manufacturing facility leases?
9. Why do the Company’s common stock lack par value?
10. The 2014 annual report said in 2015 the Company planned to “continue to service New York City Transit Authority, Savannah River Nuclear site, and the state of Hawaii with mobile and retail stores” [17], why did the latter 2 areas disappear from the 10-K filings? What happened with them?
11. For a decade the Company has said their products are “offered for sale at over 10,000 retail locations in the U.S. and Canada” [5, 6, 7, 9, 11, 13, 15, 17, 19, 21, 23]. What are the more precise numbers, and has the actual number not expanded or contracted at all?
12. Why did the Company not renew the previous Rights Agreement, helping to prevent a corporate takeover?
13. Why have the values presented in Schedule II ‘Consolidated Valuation and Qualifying Accounts for the Years’ had a notable decline over the years?
rjm22 profile picture
pat45 profile picture
@TLCVI.com so have you heard any answers to any of your questions??
rjm22 profile picture
@pat45 Look at all his posts!
Bold Investments profile picture
Does anybody know why total liabilities went up 400% in Q1 2021????????
rjm22 profile picture
@Groovenhoff on March 15, 2021 it completed its previously announced acquisition of the performance and lifestyle footwear business of Honeywell International, Inc., including The Original Muck Boot Company and XTRATUF footwear brands for $230 million.
Bold Investments profile picture
@rjm22 thank you. This is my hesitation. The Op & Net are consistently growing faster than Rev, which I love & rarely see in stocks other than the elites like APPS, IDXX, & NFLX.

However, Rev literally grew 0.7% since 2016- not CAGR... total growth. Their highest Rev year was actually '14, not this passed year. other than 2020, which was impressive, the growth has been flat. Do YOU personally think this is a blip because of C19 forcing people outside & buying outdoor supplies?

If the 2020 growth is real, how much of it was from those 2 co's you just mentioned?
rjm22 profile picture
A director bought 500 shares at $53- (actually his spouse) He last bought 6000 in Sept at $25.34
Bold Investments profile picture
thank you for pointing this one out. I just plugged the numbers not my spreadsheet. They look phenomenal. Op & Net income have been growing at a much faster rate than Rev for several years. HOWEVER: is this a COVID stock? Meaning did the pandemic force people outside & buying into hiking gear where they otherwise would not have? ho sustainable is this?
rjm22 profile picture
I have been fairly pleased that we have only seen minor insider selling given the higher prices

Today the chairman reported selling but just 8% of his position
rjm22 profile picture
@rjm22 Brooks sold another 3000-

S 2021-05-11 2021-05-13 16:45:19.0 ROCKY BRANDS, INC. RCKY BROOKS MIKE director officer (Chairman of the Board) 3,000 $61.25 $183,750.00 231,247 view
S 2021-05-10 2021-05-10 17:52:43.0 ROCKY BRANDS, INC. RCKY BROOKS MIKE director officer (Chairman of the Board) 3,700 $64.97 $240,389.00 234,247 view
S 2021-05-10 2021-05-10 17:52:43.0 ROCKY BRANDS, INC. RCKY BROOKS MIKE director officer (Chairman of the Board) 2,300 $65.82 $151,386.00 237,947 view
S 2021-05-07 2021-05-10 17:52:43.0 ROCKY BRANDS, INC. RCKY BROOKS MIKE director officer (Chairman of the Board) 8,000 $64.06 $512,480.00 240,247 view
S 2021-05-07 2021-05-10 17:52:43.0 ROCKY BRANDS, INC. RCKY BROOKS MIKE director officer (Chairman of the Board) 5,000 $65.92 $329,600.00 248,247 view
S 2021-05-06 2021-05-10 17:52:43.0 ROCKY BRANDS, INC. RCKY BROOKS MIKE director officer (Chairman of the Board) 2,000 $64.00 $128,000.00 253,247 view
rjm22 profile picture
@rjm22 His selling continues at lower prices
Another 13k+ shares

S 2021-05-18 2021-05-18 18:00:48.0 ROCKY BRANDS, INC. RCKY BROOKS MIKE director officer (Chairman of the Board) 6,548 $55.38 $362,596.00 217,921 view
S 2021-05-18 2021-05-18 18:00:48.0 ROCKY BRANDS, INC. RCKY BROOKS MIKE director officer (Chairman of the Board) 5,523 $56.26 $310,700.00 224,469 view
S 2021-05-18 2021-05-18 18:00:48.0 ROCKY BRANDS, INC. RCKY BROOKS MIKE director officer (Chairman of the Board) 1,255 $57.19 $71,773.10 229,992 view
abdulmoiz1254 profile picture
I wanted to go long pre earning and almost pressed the buy button
Now after the jump i am reluctant
abdulmoiz1254 profile picture
Good call
The stock is down below pre earning level now
Courage & Conviction Investing profile picture
Also, they guided to 20% growth for both brands, so I am modeling $530 million of FY 2021 revenue.

Existing business: $277.3 million x 120% equals $333 million

$205 million x 120% (times 80% as Honeywell closed on March 15th) equals $197 million.

So I get to $530 million in revenue in 2021?

why are you only at $453 million?
Courage & Conviction Investing profile picture
@Value Investment Principals Amen! I listened to the RCKY Q1 2021 call at 4am this morning and penned a note to my marketplace subscribers by 6am. My estimates for FY 2021, though, are closer to $7 per share. I too am very much long and plan to hold until at $75 or $80.
Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!

About RCKY

SymbolLast Price% Chg
Market Cap
Yield (TTM)
Rev Growth (YoY)
Short Interest
Prev. Close
Compare to Peers

More on RCKY

Related Stocks

SymbolLast Price% Chg
To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.