Should Weakness in Step One Clothing Limited's (ASX:STP) Stock Be Seen As A Sign That Market Will Correct The Share Price Given Decent Financials?

Simply Wall St.

Jan 14

It is hard to get excited after looking at Step One Clothing's (ASX:STP) recent performance, when its stock has declined 30% over the past three months. But if you pay close attention, you might ...

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But if you pay close attention, you might ...</p>\n\n<a href=\"https://simplywall.st/stocks/au/retail/asx-stp/step-one-clothing-shares/news/should-weakness-in-step-one-clothing-limiteds-asxstp-stock-b-1\">Source Link</a>\n\n</div>\n","source":"simplywall_highlight","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Should Weakness in Step One Clothing Limited's (ASX:STP) Stock Be Seen As A Sign That Market Will Correct The Share Price Given Decent Financials?</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nShould Weakness in Step One Clothing Limited's (ASX:STP) Stock Be Seen As A Sign That Market Will Correct The Share Price Given Decent Financials?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2026-01-14 07:36 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://simplywall.st/stocks/au/retail/asx-stp/step-one-clothing-shares/news/should-weakness-in-step-one-clothing-limiteds-asxstp-stock-b-1><strong>Simply Wall St.</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>It is hard to get excited after looking at Step One Clothing's (ASX:STP) recent performance, when its stock has declined 30% over the past three months.   But if you pay close attention, you might ...</p>\n\n<a href=\"https://simplywall.st/stocks/au/retail/asx-stp/step-one-clothing-shares/news/should-weakness-in-step-one-clothing-limiteds-asxstp-stock-b-1\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BK7049","symbol_name":"互联网与直销零售","start_time":0,"source_url":"https://simplywall.st/stocks/au/retail/asx-stp/step-one-clothing-shares/news/should-weakness-in-step-one-clothing-limiteds-asxstp-stock-b-1","article_id":"2603866432","we_media_id":null,"thumbnails":["https://images.simplywall.st/asset/industry/4422000-choice2-main-header/1585186866479"],"rights":{"source":"simplywall_highlight","url":"https://simplywall.st/stocks/au/retail/asx-stp/step-one-clothing-shares/news/should-weakness-in-step-one-clothing-limiteds-asxstp-stock-b-1","rn_cache_url":null,"directOrigin":true},"url":"https://stock-news.laohu8.com/highlight/detail?id=2603866432","pubTimestamp":1768347405,"columns":[],"sourceInfo":{"source_id":"simplywall_highlight","name":"Simply Wall St."},"weMediaInfo":null,"summary":"It is hard to get excited after looking at Step One Clothing's (ASX:STP) recent performance, when its stock has...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK7049":"互联网与直销零售","STP.AU":"Step One Clothing Ltd","BK7021":"服装零售"},"translate_title":"Step One Clothing Limited(ASX：STP)股票的疲软是否应被视为市场将在良好的财务状况下调整股价的迹象？","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"STP.AU":1.5},"content_text":"It is hard to get excited after looking at Step One Clothing's (ASX:STP) recent performance, when its stock has declined 30% over the past three months.   But if you pay close attention, you might find that its key financial indicators look quite decent, which could mean that the stock could potentially rise in the long-term given how markets usually reward more resilient long-term fundamentals.     Particularly, we will be paying attention to Step One Clothing's  ROE today.    ROE or return on equity is a useful tool to assess how effectively a company can generate returns on the investment it received from its shareholders.  In short, ROE shows the profit each dollar generates with respect to its shareholder investments. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.Advertisement How Is ROE Calculated?  Return on equity can be calculated by using the formula:  Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for Step One Clothing is:24% = AU$13m ÷ AU$52m (Based on the trailing twelve months to June 2025). The 'return' refers to a company's earnings over the last year.  That means that for every A$1 worth of shareholders' equity, the company generated A$0.24 in profit.  Check out our latest analysis for Step One Clothing   What Has ROE Got To Do With Earnings Growth?  Thus far, we have learned that ROE measures how efficiently a company is generating its profits.  Based on how much of its profits the company chooses to reinvest or \"retain\", we are then able to evaluate a company's future ability to generate profits.  Generally speaking, other things being equal, firms with a high return on equity and profit retention, have a higher growth rate than firms that don’t share these attributes.  Step One Clothing's Earnings Growth And 24% ROE  Firstly, we acknowledge that Step One Clothing has a significantly high ROE.   Additionally, the company's ROE is higher compared to the industry average of 14% which is quite remarkable.   Under the circumstances, Step One Clothing's considerable five year net income growth of 52% was to be expected.     We then compared Step One Clothing's net income growth with the industry and we're pleased to see that the company's growth figure is higher when compared with the industry which has a growth rate of 1.3% in the same 5-year period.   ASX:STP Past Earnings Growth January 13th 2026 Earnings growth is a huge factor in stock valuation.  What investors need to determine next is if the expected earnings growth, or the lack of it, is already built into the share price.  By doing so, they will have an idea if the stock is headed into clear blue waters or if swampy waters await.    Has the market priced in the future outlook for STP? You can find out in our latest intrinsic value infographic research report.   Is Step One Clothing Using Its Retained Earnings Effectively?    The really high three-year median payout ratio of 102% for Step One Clothing suggests that the company is paying its shareholders more than what it is earning.  However, this hasn't hampered its ability to grow as we saw earlier.   Although, it could be worth keeping an eye on the high payout ratio as that's a huge risk.     To know the 4 risks we have identified for Step One Clothing visit our risks dashboard for free.   While Step One Clothing has seen growth in its earnings, it only recently started to pay a dividend. It is most likely that the company decided to impress new and existing shareholders with a dividend.      Existing analyst estimates suggest that the company's future payout ratio is expected to drop to 73% over the next three years.   Still forecasts suggest that Step One Clothing's future ROE will drop to 11% even though the the company's payout ratio is expected to decrease. This suggests that there could be other factors could driving the anticipated decline in the company's ROE.      Conclusion    Overall, we feel that Step One Clothing certainly does have some positive factors to consider.      Specifically, its high ROE which likely led to the growth in earnings. Bear in mind, the company reinvests little to none of its profits, which means that investors aren't necessarily reaping the full benefits of the high rate of return.       With that said, on studying the latest analyst forecasts, we found that while the company has seen growth in its past earnings, analysts expect its future earnings to shrink.     To know more about the company's future earnings growth forecasts take a look at this free report on analyst forecasts for the company to find out more. New: Manage All Your Stock Portfolios in One PlaceWe've created the ultimate portfolio companion for stock investors, and it's free.• Connect an unlimited number of Portfolios and see your total in one currency• Be alerted to new Warning Signs or Risks via email or mobile• Track the Fair Value of your stocksTry a Demo Portfolio for FreeHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.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.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"-1","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0,"need_auth":false,"code":"91000000","status":"200"}}}