📊 COTY Key Takeaways
Is Coty Inc.. (COTY) a Good Investment?
Coty exhibits deteriorating fundamentals with declining revenue (-3.7% YoY), negative operating margins (-0.9%), and persistent net losses (-$463.8M) indicating structural profitability challenges. Critical liquidity concerns (0.82x current ratio, 0.49x quick ratio) combined with high leverage (1.03x Debt/Equity) and inability to service debt from operations (negative interest coverage) create significant financial distress risk, despite positive free cash flow.
Coty shows a mixed fundamental profile: strong gross margins and solid free cash flow generation support the business, but declining revenue and a return to net losses weaken the earnings picture. The company appears operationally resilient at the gross profit and cash flow level, yet tight liquidity and weak interest coverage limit financial flexibility and raise execution risk if growth does not recover.
Why Buy Coty Inc.. Stock? COTY Key Strengths
- Strong gross margin of 63.5% demonstrates pricing power and product competitiveness in cosmetics sector
- Positive free cash flow of $275.6M (6.1% FCF margin) provides near-term financial flexibility
- Substantial $10.2B asset base reflects established brand portfolio and market presence
- High gross margin of 64.1% indicates strong brand economics and pricing power
- Operating cash flow of $624.9M and free cash flow of $524.3M provide meaningful internal funding capacity
- Moderate debt/equity of 0.85x and a sizable equity base support balance sheet stability despite earnings pressure
COTY Stock Risks: Coty Inc.. Investment Risks
- Revenue declining 3.7% YoY with net losses of $463.8M indicating fundamental business deterioration
- Negative operating margin (-0.9%) and operating income of -$38.8M shows core business is unprofitable
- Critical liquidity crisis: current ratio 0.82x and quick ratio 0.49x with $257.1M cash against $6.7B liabilities
- Debt/Equity ratio 1.03x with $3.2B long-term debt and negative interest coverage ratio (-0.2x)
- Shareholder value destruction with ROE of -15.0% and ROA of -4.5%
- Revenue declined 3.7% year over year, signaling weak top-line momentum
- Net income remained negative and diluted EPS deteriorated sharply, reflecting poor earnings quality
- Current ratio of 0.79x, quick ratio of 0.52x, and interest coverage of 1.8x point to constrained liquidity and debt-servicing headroom
Key Metrics to Watch
- Revenue growth stabilization - return to positive growth required to validate business model
- Operating margin recovery - path to positive operating income is essential for viability
- Liquidity ratio improvement - current/quick ratios must reach 1.0x+ range to reduce default risk
- Interest coverage ratio - must achieve positive coverage from operations to reduce leverage concerns
- Revenue growth and operating margin progression
- Interest coverage and free cash flow sustainability
Coty Inc.. (COTY) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The current ratio below 1.0x warrants monitoring of short-term liquidity.
COTY Profit Margin, ROE & Profitability Analysis
COTY vs Consumer Sector: How Coty Inc.. Compares
How Coty Inc.. compares to Consumer sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Coty Inc.. Stock Overvalued? COTY Valuation Analysis 2026
Based on fundamental analysis, Coty Inc.. shows some fundamental concerns relative to the Consumer sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Coty Inc.. Balance Sheet: COTY Debt, Cash & Liquidity
COTY Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Coty Inc..'s revenue has remained relatively flat over the 5-year period, with a 3% decline. The most recent EPS of $0.57 reflects profitable operations.
COTY Revenue Growth, EPS Growth & YoY Performance
COTY Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2026 | $1.3B | -$299.1M | $-0.36 |
| Q2 2026 | $1.7B | $23.7M | $0.02 |
| Q1 2026 | $1.6B | $67.9M | $0.07 |
| Q3 2025 | $1.3B | $3.8M | $0.00 |
| Q2 2025 | $1.7B | $23.7M | $0.02 |
| Q1 2025 | $1.6B | $1.6M | $0.00 |
| Q3 2024 | $1.3B | $3.8M | $0.00 |
| Q2 2024 | $1.5B | $180.9M | $0.20 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Coty Inc.. Dividends, Buybacks & Capital Allocation
COTY SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Coty Inc.. (CIK: 0001024305)
📋 Recent SEC Filings
❓ Frequently Asked Questions about COTY
What is the AI rating for COTY?
Coty Inc.. (COTY) has a Combined AI Rating of SELL from Claude (STRONG SELL) and ChatGPT (HOLD) with 80% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are COTY's key strengths?
Claude: Strong gross margin of 63.5% demonstrates pricing power and product competitiveness in cosmetics sector. Positive free cash flow of $275.6M (6.1% FCF margin) provides near-term financial flexibility. ChatGPT: High gross margin of 64.1% indicates strong brand economics and pricing power. Operating cash flow of $624.9M and free cash flow of $524.3M provide meaningful internal funding capacity.
What are the risks of investing in COTY?
Claude: Revenue declining 3.7% YoY with net losses of $463.8M indicating fundamental business deterioration. Negative operating margin (-0.9%) and operating income of -$38.8M shows core business is unprofitable. ChatGPT: Revenue declined 3.7% year over year, signaling weak top-line momentum. Net income remained negative and diluted EPS deteriorated sharply, reflecting poor earnings quality.
What is COTY's revenue and growth?
Coty Inc.. reported revenue of $4.5B.
Does COTY pay dividends?
Coty Inc.. pays dividends, with $9.9M distributed to shareholders in the trailing twelve months.
Where can I find COTY SEC filings?
Official SEC filings for Coty Inc.. (CIK: 0001024305) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is COTY's EPS?
Coty Inc.. has a diluted EPS of $-0.54.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined rating reflects both perspectives for balanced insights.
Is COTY a good stock to buy right now?
Based on our AI fundamental analysis in May 2026, Coty Inc.. has a SELL rating with 80% confidence. Review the strengths and risks sections above before making a decision. This is not investment advice.
Is COTY stock overvalued or undervalued?
Valuation metrics for COTY: ROE of -15.0% (sector avg: 18%), net margin of -10.2% (sector avg: 8%). Compare these metrics with sector averages to assess valuation.
Should I buy COTY stock in 2026?
Our dual AI analysis gives Coty Inc.. a combined SELL rating for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is COTY's free cash flow?
Coty Inc..'s operating cash flow is $421.8M, with capital expenditures of $146.2M. FCF margin is 6.1%.
How does COTY compare to other Consumer stocks?
Vs Consumer sector averages: Net margin -10.2% (avg: 8%), ROE -15.0% (avg: 18%), current ratio 0.82 (avg: 1.5).