Burlington
BURL
$368.23
-0.07%
Burlington Stores, Inc. is an off-price retailer offering a broad assortment of in-season, fashion-focused merchandise including apparel, footwear, accessories, home goods, and beauty products, operating primarily in the U.S. As a key player in the off-price retail segment, Burlington competes with TJX Companies and Ross Stores, leveraging its treasure-hunt shopping experience and direct sourcing from national brands. The current investor narrative centers on the company's robust earnings growth and raised guidance, yet recent results have been met with high expectations, leading to debates about valuation sustainability. With a market cap of approximately $23.4 billion and a 34.99% one-year price increase, Burlington is attracting attention for its ability to gain market share in a challenging consumer environment, while investors weigh the risks of overvaluation and potential slowdown in discretionary spending.…
BURL
Burlington
$368.23
Related headlines
Investment Opinion: Should I buy BURL Today?
Rating: Hold. Burlington is a high-quality growth company with accelerating revenue and strong profitability, but the stock is fairly valued at current levels, offering limited upside to the average analyst target of $367.07 (implying -0.4% downside). The consensus is bullish, but the recent downgrade and high expectations suggest caution. The thesis is that BURL's growth justifies a premium, but the risk-reward is balanced at this price.
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BURL 12-Month Price Forecast
The AI assessment is neutral, reflecting a balanced risk-reward. Burlington's strong growth and profitability are offset by a premium valuation and high expectations. The stock is likely to trade in a range around the average target, with upside if growth accelerates and downside if it disappoints. Key factors to watch are revenue growth sustainability, margin trends, and consumer spending. An upgrade to bullish would require evidence of accelerating growth and margin expansion, while a downgrade to bearish would be triggered by a growth slowdown or margin compression.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Burlington's 12-month outlook, with a consensus price target around $371.73 and implied upside of +0.9% versus the current price.
Average Target
$371.73
0 analysts
Implied Upside
+0.9%
vs. current price
Analyst Count
—
covering this stock
Price Range
$300 - $435
Analyst target range
Burlington is covered by 15 analysts, with a consensus recommendation leaning bullish, as evidenced by recent actions from major firms like JP Morgan (Overweight), Wells Fargo (Overweight), and B of A Securities (Buy). The average target price is $367.07, which is slightly below the current price of $368.48, implying a marginal downside of -0.4%. The target range spans from $300 (low) to $435 (high), indicating a wide dispersion in expectations. The low target suggests concerns about a potential pullback due to high expectations, while the high target implies significant upside if the company continues to execute on its growth strategy. The recent downgrade by Truist Securities from Buy to Hold on May 18, 2026, and the stock's 16.99% one-month gain, suggest that some analysts see limited near-term upside, but the overall sentiment remains positive, with no sell ratings observed in the provided data.
Bulls vs Bears: BURL Investment Factors
Burlington presents a compelling growth story with accelerating revenue, improving margins, and strong analyst support, but the stock trades at a premium valuation with high expectations. The bull case is supported by robust fundamental performance and market share gains, while the bear case hinges on valuation risk and potential cost pressures. The most critical tension is whether the company can sustain its growth trajectory to justify the premium P/E, or if any slowdown will lead to multiple compression. Currently, the bull case has stronger evidence given the consistent acceleration and profitability, but investors should monitor margin trends and FCF closely.
Bullish
- Accelerating Revenue Growth: Q1 2026 revenue grew 14.08% YoY to $2.856B, up from 8.1% growth in Q1 2025, marking the fourth consecutive quarter of acceleration. This momentum is driven by strong apparel and home categories, indicating robust market share gains.
- Improving Gross Margin: Gross margin expanded to 44.17% in Q1 2026 from 43.89% a year ago, reflecting better inventory management and pricing power. This improvement supports profitability even as the company invests in growth.
- Strong ROE and Profitability: ROE stands at a robust 33.76%, with net margin stable at 4.02% in Q1 2026. The company's ability to generate high returns on equity while maintaining margins underscores its operational efficiency.
- Positive Analyst Sentiment: Major firms like JP Morgan, Wells Fargo, and B of A Securities maintain Overweight/Buy ratings. The consensus average target of $367.07 is near the current price, but the high target of $435 implies 18% upside, reflecting confidence in the growth story.
Bearish
- High Valuation Premium: Trailing P/E of 31.11x is 41% above the industry average of 22x, and forward P/E of 26.72x implies the market already prices in 16.4% earnings growth. Any miss on growth could trigger multiple compression.
- Negative Free Cash Flow: Q1 2026 free cash flow was -$228.2 million due to heavy capex of $289.7 million. While investments are for growth, sustained negative FCF could strain the balance sheet, especially with a high debt-to-equity ratio of 3.32.
- Rising SG&A Expenses: SG&A expenses increased 14% YoY to $989.4 million, outpacing revenue growth, leading to a decline in operating margin to 5.87% from 5.55% in Q1 2025. This cost pressure could erode profitability if not managed.
- High Expectations Risk: Despite beating earnings estimates, the stock fell as investor expectations were even higher. The recent 16.99% one-month gain and proximity to 52-week high (97.4% of high) suggest limited near-term upside and potential for a pullback.
BURL Technical Analysis
Burlington's stock is in a strong uptrend, with a one-year price change of +34.99%, significantly outperforming the S&P 500's 18.19% gain. The current price of $368.48 sits near the top of its 52-week range, at 97.4% of the high of $378.33, indicating robust momentum and investor confidence. This positioning near highs suggests the stock is trading with positive momentum, though it also raises concerns about potential overextension, especially given the beta of 1.46, which implies higher volatility than the market.
Beta
1.47
1.47x market volatility
Max Drawdown
-19.6%
Largest decline past year
52-Week Range
$240-$378
Price range past year
Annual Return
+34.8%
Cumulative gain past year
| Period | BURL Return | S&P 500 |
|---|---|---|
| 1m | +17.6% | +1.7% |
| 3m | +17.8% | +4.7% |
| 6m | +22.6% | +10.4% |
| 1y | +34.8% | +21.9% |
| ytd | +23.4% | +11.1% |
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BURL Fundamental Analysis
Burlington's revenue growth is accelerating, with the most recent quarter (Q1 2026) reporting revenue of $2.856 billion, a 14.08% year-over-year increase, up from 8.1% growth in Q1 2025. This marks the fourth consecutive quarter of accelerating growth, driven by strong performance in apparel and home categories. The company's net income for Q1 2026 was $114.7 million, with a net margin of 4.02%, up from 4.03% in the prior year, indicating stable profitability. Gross margin improved to 44.17% from 43.89% a year ago, reflecting better inventory management and pricing power. However, operating margin declined to 5.87% from 5.55% in Q1 2025, due to higher SG&A expenses, which increased to $989.4 million from $868.1 million, a 14% rise, outpacing revenue growth. The balance sheet shows a debt-to-equity ratio of 3.32, which is high, but the company generated $61.5 million in operating cash flow in Q1 2026, though free cash flow was negative at -$228.2 million due to heavy capital expenditures of $289.7 million. ROE is strong at 33.76%, and the current ratio of 1.23 indicates adequate liquidity, but the high leverage and negative FCF warrant monitoring.
Quarterly Revenue
$2.9B
2026-05
Revenue YoY Growth
+14.1%
YoY Comparison
Gross Margin
44.2%
Latest Quarter
Free Cash Flow
$436736000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
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Valuation Analysis: Is BURL Overvalued?
Given Burlington's positive net income, the trailing P/E ratio of 31.11x is the primary valuation metric, with a forward P/E of 26.72x, implying the market expects earnings growth of about 16.4% over the next year. The PEG ratio of 1.54 suggests the stock is fairly valued relative to its growth rate. Compared to the industry average P/E of 22x (based on available data), Burlington trades at a 41% premium, reflecting its superior growth and profitability. Historically, the stock's P/E has ranged from 13.4x to 212x over the past five years, with the current 31.1x near the lower end of that range, indicating that the stock is not excessively valued by historical standards. The P/S ratio of 1.64x is below the 5-year average of 5.5x, suggesting potential undervaluation on a sales basis, though this is skewed by the recent surge in earnings.
PE
31.1x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 13x~137x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
18.2x
Enterprise Value Multiple
Investment Risk Disclosure
Financial risks are notable: Burlington carries a high debt-to-equity ratio of 3.32, which amplifies financial risk, especially if interest rates remain elevated. The company's negative free cash flow of -$228.2 million in Q1 2026, driven by heavy capex, could strain liquidity if sustained. While operating cash flow was positive at $61.5 million, the gap between capex and cash generation is a concern. Additionally, the operating margin declined to 5.87% from 5.55% a year ago due to rising SG&A costs, indicating potential margin pressure if cost controls falter. The current ratio of 1.23 provides some cushion, but the high leverage and negative FCF warrant close monitoring.
FAQ
The key risks are: 1) Valuation risk - the stock trades at a premium P/E of 31.11x, and any growth slowdown could lead to multiple compression. 2) Financial risk - high debt-to-equity of 3.32 and negative free cash flow of -$228.2 million in Q1 2026 could strain the balance sheet. 3) Competitive risk - intense competition from TJX and Ross could pressure margins. 4) Macro risk - with a beta of 1.46, the stock is sensitive to economic downturns, and a consumer spending pullback could hurt revenues. The most severe risk is a combination of these factors leading to a drop to the 52-week low of $240.49, a -34.7% decline.
The 12-month forecast is mixed. In the base case (50% probability), the stock trades around the average analyst target of $367, with a range of $340-$380. In the bull case (25% probability), it could reach $400-$435 if growth accelerates and margins expand. In the bear case (25% probability), it could fall to $280-$320 if growth slows or the market corrects. The most likely scenario is the base case, assuming revenue growth continues at 12-14% and margins remain stable. Investors should watch for earnings reports and consumer spending data to adjust expectations.
BURL is fairly valued relative to its growth, but trading at a premium to the industry. The trailing P/E of 31.11x is 41% above the industry average of 22x, reflecting its superior growth and profitability. The PEG ratio of 1.54 suggests the stock is reasonably priced for its expected earnings growth of 16.4%. Historically, the P/E has ranged from 13.4x to 212x, and the current 31.1x is near the lower end, indicating it's not excessively valued by its own history. The P/S ratio of 1.64x is below the 5-year average of 5.5x, but this is skewed by recent earnings surge. Overall, the market is pricing in continued strong growth, and any disappointment could lead to de-rating.
BURL is a good buy for investors with a long-term horizon who believe in the company's growth story. The stock has strong fundamentals, with revenue growth accelerating to 14.08% YoY and a high ROE of 33.76%. However, the current price of $368.48 is near the average analyst target of $367.07, implying limited upside. The biggest risk is valuation compression if growth slows. For value-focused investors, a pullback to the $340 range would offer a better risk-reward. Overall, it's a quality company, but not a bargain at current levels.
BURL is better suited for long-term investment given its growth trajectory and strong market position. The stock has a beta of 1.46, indicating higher volatility, which makes it less suitable for short-term trading unless one is comfortable with swings. The company's accelerating revenue growth and improving margins suggest it can compound earnings over time, but the premium valuation means short-term price movements could be driven by sentiment. A minimum holding period of 3-5 years is recommended to ride out volatility and benefit from the company's growth. For short-term traders, the stock's momentum and high beta offer opportunities, but the risk of a pullback is significant.