DSK valuation, page-4

Good to know. So it is as simple as it seems. If one believes the company will be able to grow on 2021 revenues, it's a strong buy.
Realistically, the drop in revenue would be limited to 20% I would say. No growth is priced in at the moment so even if revenue dropped by 20% a PE of 8.5 would be easily justifiable. Point being, downside risk is limited.

I'm not familiar with retail stock PEs. I mostly go for growth companies and a very high quality medium growth company (12% growth per year every year for the long term >20 years e.g. FPH, CSL) trade around a PE of 40. Even if DSK performs well it will not be able to achieve this level of growth for the next 20 years so clearly a PE of 30 or 40 is out. But if it can growth 10% yoy for the foreseeable future, is there any chance of this trading with a PE of 20? I note Lovisa chugging along with a PE in the 30s for the last few years. I guess the key for a higher PE would be international expansion ideally beyond NZ (and into EU/UK/US).

I also note HLG trading at a PE around 13 and that seems to be in a similar boat to HLG. There is some level of growth and their divided yield is mid 8% - nearly identical to DSK.

What are some other players in this retail space trading at? Another one I thought of is The Warehouse here in NZ and that also trades around a PE of 10. But I note their margins are probably horrible and growth is next to nothing (if any).

Dreams are free so lets say Mr King decides on international expansion, a PE of 30 would be 3.5~ x the current PE giving a SP of $13. In the case there is no expansion and a contraction in sales, a PE of 8 would be maintained so the SP would drop by whatever amount the future profits drop by.

I suppose the only real risk to the SP is potential competition or change in trends where consumers stop buying scented candles and diffusers for some new craze