8 Most Undervalued Penny Stocks To Buy According To Analysts

2. Torrid Holdings Inc. (NYSE:CURV)

Share Price: $3.30

Forward P/E: 17.1

Earnings Growth: 63.60% 

Number of Hedge Fund Holders: 3

Analyst Upside: 112.12%

Torrid Holdings Inc. (NYSE:CURV) is a retail company that designs and sells plus-size clothing for women. Its products are designed specifically for sizes 10 to 30. Its products range from tops, bottoms, dresses, activewear, intimates, and accessories. It sells products through both online and 655 physical stores spread across the United States, Canada, and Puerto Rico.

Much like other apparel companies Torrid Holdings Inc. (NYSE:CURV) is also facing difficulty from a challenging consumer environment. However, management scaled down its markdowns to lift its profit margins during the most recent quarter. In the second quarter, comparable sales were down by 0.8% however, the full-price comparable sales were up 6.4%.

The company was able to successfully cut its inventory levels by 19% leading to a 323 basis points improvement in margins. Management expects its sales to return to positive single digits during the second half of 2024.

Argosy Investors made the following comment about Torrid Holdings Inc. (NYSE:CURV) in its second quarter 2023 investor letter:

“During the quarter, I did mostly housekeeping, selling a couple of smaller positions in Torrid Holdings Inc. (NYSE:CURV) and Ollie’s Bargain Outlet. First, Torrid Holdings was never a large position, but it performed horribly during my ownership of the position. Body positivity, as it turns out, was not a positive development for Torrid. Long operating somewhat alone in the plus size women’s apparel (that women actually want to wear) category, COVID and the advent of stars such as musical artist Lizzo shined a light on women who did not fit the traditional definition of beauty. As a result, every retailer from Victoria’s Secret to Sephora has embraced body positivity, featuring plus size models in their marketing content and making clothes for larger people. Torrid lost its differentiated position in the market, and I believe has been struggling to remain relevant when plus size women have so many more options than they used to. In any event, this women’s fashion has never been something I considered myself an expert in, so perhaps I should be a little more cautious next time I venture into this quixotic realm.”