Copyright Forbes
Tapestry (TPR) stock could be a promising option to capitalize on the momentum. Why? Because it offers strong margins, a low-debt capital structure, and strong momentum. Tapestry's stock is driven by a strategic shift, highlighted by the sale of its Stuart Weitzman brand in August 2025 and the subsequent effective implementation of its Amplify Growth Strategy, which was introduced during its investor day in September 2025. This is illustrated by Q1 FY26 revenue rising by 13.1% to $1.7 billion, driven primarily by a 22% sales increase at Coach. The company's heightened focus on core brands and appealing to Gen Z consumers supports its improved full-year projections and planned $1.3 billion in shareholder returns for FY26. Why purchase now? Here are some figures: Revenue Growth: Tapestry experienced revenue growth of 8.1% over the Last Twelve Months (LTM) and a 2.5% average over the past three years, though this isn't a pure growth narrative. Long-Term Profitability: Approximately 18.2% operating cash flow margin and 17.8% operating margin on a three-year average basis. Strong Momentum: Currently ranks in the top 10 percentile of stocks regarding “trend strength” – a proprietary metric we employ to gauge momentum. Room to Grow: Despite its positive momentum, TPR stock is trading 11% beneath its 52-week apex. While revenue growth is advantageous, this investment choice revolves around harnessing momentum alongside quality – which we assess based on margins (indicative of pricing power / robust business model) and capital structure (not overly laden with debt). To provide some context, Tapestry specializes in luxury accessories and branded lifestyle products worldwide, functioning through three segments: Coach, Kate Spade, and Stuart Weitzman (before divestiture), supported by a vast retail network consisting of 939 Coach locations. MORE FOR YOU *LTM: Last Twelve Months But do these figures provide the complete picture? Read Buy or Sell TPR Stock to determine if Tapestry still retains a competitive advantage upon closer examination. Is holding TPR stock risky? Absolutely. High Quality Portfolio helps mitigate that risk. Stocks Like These Can Outperform. Here Is Data Here’s how we select stocks: We look for companies with a market cap of over $2 billion, high operating and cash flow from operations (CFO) margins, no significant revenue declines in the preceding 5 years, low-debt capital structures, and strong momentum as defined by our proprietary momentum metric. Below are statistics for stocks that fit this selection strategy, applied between 12/31/2016 and 6/30/2025. Average 12-month forward returns of nearly 15% 12-month win rate (the percentage of picks returning positive) of about 60% But Consider The Risk That being said, TPR is not immune to significant downturns. It plummeted 78% during the Global Financial Crisis, nearly 64% during the Covid sell-off, and around 63% in the 2018 correction. The Dot-Com crash and the recent inflation shock also had severe impacts, with declines close to 48% and 45% respectively. Even robust companies like TPR experience steep drops when the market declines. However, the risk is not confined to major market crashes. Stocks can decline even when market conditions are favorable – consider events such as earnings announcements, business updates, and outlook changes. Read TPR Dip Buyer Analyses to find out how the stock has bounced back from sharp declines in the past.
