One-glance verdict
Undervalued
$17.73 our estimate vs market $4.16
Wall Street consensus: $5.00 (-71.8% lower than our fair-value estimate)
77% below our estimate, below the bear case
Fundamentals snapshot
Vera Bradley, Inc.
VRA · NMS · Consumer Cyclical · Footwear & Accessories
Current price
$4.16
52-week range
$1.39 - $4.58
Market cap
$119.34M
Balance sheet
Distressed
-66.91x Concerning
Net debt $36.72M. Interest coverage shows how many times profit covers the interest bill.
What stands out
2 Rewards
2 Risks
2 rewards · 2 risks
- Reward Revenue grew 1.8% last year.
- Reward Free cash flow was positive in 7/10 years.
- Risk Net debt grew 8.9% over 3 years.
- Risk Return on equity was -7.4% last year — the company lost money on shareholders' equity.
What this company does
Vera Bradley, Inc.
Vera Bradley designs and sells colorful women's handbags, luggage, and accessories. The company makes money by selling through partner department stores and also directly to shoppers in its own stores and on its website. Having its own stores is important because it often leads to higher profit margins (the percentage of each sale that is pure profit) and gives the company more control over its brand image.
How the company got here
Vera Bradley was started in 1982 by two friends, Patricia Miller and Barbara Baekgaard, who noticed a lack of colorful, feminine luggage while waiting in an airport. With just $500, they began designing and selling quilted cotton bags from a basement, naming the company after Barbara's mother. The brand's distinctive patterns became popular, leading to significant growth and eventually becoming a publicly traded company. A key recent event was the company's purchase and subsequent sale of the Pura Vida jewelry brand, a move made to refocus all its energy on the original Vera Bradley business.
What it actually does
The company sells a wide variety of products featuring its signature colorful and vibrant patterns, primarily for women. You would recognize their quilted cotton handbags, backpacks, and duffel bags, which are their most well-known items. Beyond bags, they also sell travel accessories, wallets, throw blankets, sleepwear, and even stationery. The company often releases new patterns seasonally and sometimes partners with other major brands like Disney for special collections.
Vera Bradley Direct
This is the company's largest business segment, where it sells products straight to shoppers like you. This includes sales from their own physical retail locations, both full-price stores and outlet stores, which you might see in a shopping center. It also covers all online sales from their websites, like verabradley.com. This direct-to-consumer channel is the main way Vera Bradley makes money, representing the vast majority of its total revenue (the total money brought in from sales).
Vera Bradley Indirect
This part of the business involves selling products in bulk to other companies, rather than directly to individual customers. For example, you might find Vera Bradley products for sale in department stores or small independent gift shops; those stores bought the items through the Indirect business. This segment also includes revenue from licensing agreements (letting other companies pay to use the Vera Bradley name and patterns on their own products, like phone cases or bedding). This is a smaller piece of the company's overall business compared to its direct sales.
What management is betting on now
The company's leadership is focused on a turnaround strategy, sometimes called 'Project Sunshine,' to improve the business and restore profitability (the ability to make more money than it spends). A major step was selling the Pura Vida brand to concentrate fully on strengthening the core Vera Bradley brand. They are working on making the company more efficient to cut costs and are heavily focused on growing their direct sales, especially through their own website and stores. The goal is to get back to consistent growth by sharpening the brand's image and carefully managing inventory (the amount of product it has on hand).
Price history
How the share price has moved
—
Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2025 Q4
$-25.01M
FY2026 Q1
$17.33M
FY2026 Q2
$-19.77M
FY2026 Q3
$-6.14M
FY2026 Q4
$-4.46M
FY2027 Q2
$-5.58M
FY2027 Q3
$22.27M
Revenue
$71.65M
Net income
$4.50M
Diluted EPS
0.15
Operating cash flow
$22.97M
Free cash flow
$22.27M
Fetching…
Sources
Revenue
$55.70M
Net income
$-4.83M
Diluted EPS
-0.17
Operating cash flow
$-5.25M
Free cash flow
$-5.58M
Fetching…
Sources
Revenue
$62.25M
Net income
$-12.37M
Diluted EPS
-0.44
Operating cash flow
$-4.00M
Free cash flow
$-4.46M
Fetching…
Sources
Revenue
$70.86M
Net income
$-4.67M
Diluted EPS
-0.17
Operating cash flow
$-5.40M
Free cash flow
$-6.14M
Fetching…
Sources
Revenue
$51.65M
Net income
$-33.46M
Diluted EPS
-1.20
Operating cash flow
$-17.90M
Free cash flow
$-19.77M
Fetching…
Sources
Revenue
$86.36M
Net income
$-46.97M
Diluted EPS
-1.69
Operating cash flow
$21.66M
Free cash flow
$17.33M
Fetching…
Sources
Revenue
$80.58M
Net income
$-12.80M
Diluted EPS
-0.46
Operating cash flow
$-22.61M
Free cash flow
$-25.01M
Fetching…
Sources
Is it cheap or expensive?
Fair value $17.73 vs current price $4.16
Wall Street consensus is the average analyst price target: $5.00 (-71.8% lower than our fair-value estimate).
Our most-likely fair value is $17.73 a share — about 326.3% above today's price of $4.16, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Distressed
Net debt $36.7M. Interest coverage -66.9x.
Net debt
$36.72M
Interest coverage
-66.91x
Vera Bradley, Inc.'s profit covers its interest bill about 0.0 times over. which is weaker than most peers shown here.
Distressed
Worse cushion
Baseline
Better cushion
VRA
BASELINE
Vera Bradley, Inc.
Total debt $70.97M Interest coverage -66.91x This is the baseline the peer rows are being compared against.
Total debt $3.96B Interest coverage 34.68x This peer still has a real interest-payment cushion, while VRA does not.
Total debt $1.39B Interest coverage 1.01x This peer still has a real interest-payment cushion, while VRA does not.
Total debt $377.14M Interest coverage 6.60x This peer still has a real interest-payment cushion, while VRA does not.
Total debt $341.94M Interest coverage 1.14x This peer still has a real interest-payment cushion, while VRA does not.
Total debt $340.84M Interest coverage 308.17x This peer still has a real interest-payment cushion, while VRA does not.
What you should know
The case for and against VRA
2 Rewards
2 Risks
Rewards
-
Revenue grew 1.8% last year.
-
Free cash flow was positive in 7/10 years.
Risks
-
Net debt grew 8.9% over 3 years.
-
Return on equity was -7.4% last year — the company lost money on shareholders' equity.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
—
Forward P/E
-138.67x
P/B
0.93x
P/S
0.43x
EV/EBITDA
-107.11x
PEG ratio
1.15x
Profitability
How much profit each dollar creates
Gross margin
50.4%
Operating margin
5.9%
Net margin
-3.7%
ROE
-7.4%
ROA
-2.1%
Health
Liquidity and balance-sheet strength
Debt / equity
0.54x
Current ratio
2.44x
Quick ratio
0.92x
Total debt
$70.97M
Total cash
$34.25M
Growth
How the business has been compounding
Revenue TTM
$274.49M
Revenue 5Y CAGR
-16.0%
EPS TTM
-0.36
EPS 5Y CAGR
—
Cash flow
How much cash the business throws off
Operating CF TTM
$31.05M
Free CF TTM
$-13.26M
FCF margin
-4.8%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
—