Cato Corporation (The) Class A Common Stock (CATO)

FairStock Score: 51/100 — MIXED

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I approach Cato as a retailer in a tough field, not a franchise. It sells fashion apparel and accessories mostly in the southeastern United States, with 6,700 employees; this is a competitive, style-driven business with no obvious moat. The filed numbers show why caution is warranted. In fiscal 2023, the period ended 2024-02-03, revenue was $700.3M and net loss was $23.9M, or EPS -$1.17. In fiscal 2024, the period ended 2025-02-01, revenue was $642.1M and net loss was $18.1M, or EPS -$0.97. In fiscal 2025, the period ended 2026-01-31, revenue was $646.8M and net loss narrowed to $5.9M, or EPS -$0.31. More recently, in fiscal Q1 2026, the quarter ended 2026-05-02, net income was $9.3M and EPS was $0.47; in fiscal Q2 2026, the quarter ended 2026-08-01, net income was $1.1M and EPS was $0.06. That hints at a turnaround, but profitability is thin and inconsistent. At $2.34 on 2026-10-13, market cap is $44.5M. FairStock calculations show P/B 0.26, P/E -8.07, ROE -3.29%, ROCE -2.13%, and D/E 0.83. The asset price looks cheap, but FairStock's Altman Z 0.76 flags distress, EV/EBITDA 102.83 is extremely high, and TTM FCF is only $1.6M, a 3.7% FCF yield. FairStock's Piotroski 7/9 and a 0.55 beta offer some comfort, yet the company must string together real profits. FairStock's Lynch category is TURNAROUND — Loss in the latest year after earlier profits. I would call it a speculative asset play, not a durable compounder.

In plain English: The company sells clothes and accessories in stores and online, mostly in the southeastern United States. It has been losing money in recent full years, and sales have been soft, so the business looks weak right now. The stock price looks low compared with the company's stated asset value, but it is only cheap if profits improve and losses stop.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q2 2026 10-Q (period ended 2026-08-01) · fiscal Q1 2026 10-Q (period ended 2026-05-02) · fiscal Q3 2025 10-Q (period ended 2025-11-01) · fiscal Q2 2025 10-Q (period ended 2025-08-02) · FY2025 10-K (period ended 2026-01-31) · FY2024 10-K (period ended 2025-02-01) · FY2023 10-K (period ended 2024-02-03)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer