Canada Goose Holdings Inc. (TSE:GOOS) shareholders have had their patience rewarded with a 35% share price jump in the last month. Looking back a bit further, it’s encouraging to see the stock is up 48% in the last year.
Following the firm bounce in price, Canada Goose Holdings’ price-to-earnings (or “P/E”) ratio of 43.1x might make it look like a strong sell right now compared to the market in Canada, where around half of the companies have P/E ratios below 16x and even P/E’s below 9x are quite common. However, the P/E might be quite high for a reason and it requires further investigation to determine if it’s justified.
Canada Goose Holdings could be doing better as its earnings have been going backwards lately while most other companies have been seeing positive earnings growth. It might be that many expect the dour earnings performance to recover substantially, which has kept the P/E from collapsing. If not, then existing shareholders may be extremely nervous about the viability of the share price.
Check out our latest analysis for Canada Goose Holdings
TSX:GOOS Price to Earnings Ratio vs Industry September 9th 2025 Want the full picture on analyst estimates for the company? Then our free report on Canada Goose Holdings will help you uncover what’s on the horizon. What Are Growth Metrics Telling Us About The High P/E?
The only time you’d be truly comfortable seeing a P/E as steep as Canada Goose Holdings’ is when the company’s growth is on track to outshine the market decidedly.
Retrospectively, the last year delivered a frustrating 23% decrease to the company’s bottom line. As a result, earnings from three years ago have also fallen 42% overall. Accordingly, shareholders would have felt downbeat about the medium-term rates of earnings growth.
Looking ahead now, EPS is anticipated to slump, contracting by 38% per year during the coming three years according to the ten analysts following the company. With the market predicted to deliver 11% growth per year, that’s a disappointing outcome.
In light of this, it’s alarming that Canada Goose Holdings’ P/E sits above the majority of other companies. It seems most investors are hoping for a turnaround in the company’s business prospects, but the analyst cohort is not so confident this will happen. There’s a very good chance these shareholders are setting themselves up for future disappointment if the P/E falls to levels more in line with the negative growth outlook.
The Final Word
Shares in Canada Goose Holdings have built up some good momentum lately, which has really inflated its P/E. We’d say the price-to-earnings ratio’s power isn’t primarily as a valuation instrument but rather to gauge current investor sentiment and future expectations.
We’ve established that Canada Goose Holdings currently trades on a much higher than expected P/E for a company whose earnings are forecast to decline. When we see a poor outlook with earnings heading backwards, we suspect the share price is at risk of declining, sending the high P/E lower. Unless these conditions improve markedly, it’s very challenging to accept these prices as being reasonable.
And what about other risks? Every company has them, and we’ve spotted 1 warning sign for Canada Goose Holdings you should know about.
It’s important to make sure you look for a great company, not just the first idea you come across. So take a peek at this free list of interesting companies with strong recent earnings growth (and a low P/E).
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.