The Cato Corporation (CATO) Stock Analysis
For informational purposes only. Not financial advice. Analysis by Sedat ANAK, Founder & Editor-in-Chief | AI-powered analysis. Data sourced from SEC filings and institutional-grade financial providers. Editorially reviewed. Not financial advice.
The Cato Corporation (CATO) trades at $3.78 with AI Score 40/100 (Grade C). The Cato Corporation is a specialty retailer of fashion apparel and accessories, primarily operating in the southeastern United States. Market cap: $68.8M, Sector: Consumer cyclical.
Price as of Aug 20, 2026 · Last analyzed: May 10, 2026Analyst Coverage for CATO: CATO does not currently have published analyst price targets in our coverage universe. This is common for smaller-cap names with limited Wall Street coverage. In the absence of analyst consensus, our AI model evaluates CATO against Consumer Cyclical peers across nine fundamental dimensions and assigns an underweight signal based on the underlying data.
CATO: 2/3 scored disciplines lean bearish. Dominant signal: Ken Griffin bullish.
How is this calculated? →Why this analysis is different
- A sector-relative MoonshotScore — five pillars (business quality, financial safety, valuation, growth durability, momentum) re-ranked nightly against the full universe of US-listed common stocks.
- An AI Council read across up to eight perspectives — value, macro, quantitative, and momentum lenses — that shows where they disagree instead of averaging the tension away.
- Figures come straight from FMP and Yahoo Finance filings data. The AI writes the narrative around the numbers — it never edits the numbers.
The Cato Corporation (CATO) Consumer Business Overview
The Cato Corporation, established in 1946, operates as a specialty retailer of fashion apparel and accessories, primarily in the southeastern United States. With a focus on value and convenience, the company serves a diverse customer base through its various store formats and e-commerce platforms, maintaining a significant presence in its regional market.
What Is the Investment Thesis for CATO?
The Cato Corporation presents a mixed investment thesis. With a market capitalization of $68.8M, the company's small size may offer potential for growth if strategic initiatives are successful. However, the company's negative profit margin of -1.0% raises concerns about profitability. The gross margin of 32.5% indicates some ability to control costs, but improvements are needed to achieve profitability. The company's beta of 0.62 suggests lower volatility compared to the market. Growth catalysts include potential expansion of its e-commerce platform and strategic store openings. However, risks include intense competition and changing consumer preferences. Investors should carefully consider these factors when evaluating The Cato Corporation.
Based on FMP financials and quantitative analysis
CATO Key Highlights
Market Cap of $68.8M reflects the company's small size and potential for growth or volatility.
- Profit Margin of -1.0% indicates challenges in achieving profitability and cost management.
- Gross Margin of 32.5% demonstrates the company's ability to manage production costs but needs improvement for overall profitability.
- Operates 1,311 stores in 32 states as of January 29, 2022, indicating a significant retail footprint.
- Beta of 0.62 suggests lower volatility compared to the overall market, potentially appealing to risk-averse investors.
Who Are CATO's Competitors?
CATO is benchmarked below against 8 industry peers on price, market cap, and our AI MoonshotScore.
| Company | Price | Change | Market Cap | AI Score |
|---|---|---|---|---|
| GPS The Gap, Inc. | $24.55 | +4.38% | $9.21B | 50 |
| URBN Urban Outfitters, Inc. | $72.65 | -2.33% | $6.22B | 78 |
| JWN Nordstrom, Inc. | $24.66 | +0.08% | $4.12B | 48 |
| RTMAF Reitmans (Canada) Limited | $1.32 | +0.00% | $66.1M | 48 |
| GLFGF Global Fashion Group S.A. | $0.33 | +0.00% | $75.4M | 51 |
| RTMNF Reitmans (Canada) Limited | $1.51 | +0.00% | $75.6M | 47 |
| ENMHF ENM Holdings Limited | $0.06 | +0.00% | $99.0M | 49 |
| RROTF Roots Corporation | $2.63 | +5.20% | $103M | 47 |
AI Score by Stock Expert AI · Price data: FMP / Yahoo Finance
What Are CATO's Key Strengths?
Established brand with a long history.
- Extensive retail network in the southeastern United States.
- Offers credit card services and layaway plans.
- Focus on value-oriented fashion apparel.
What Are CATO's Weaknesses?
Negative profit margin.
- Limited geographic diversification.
- Small market capitalization.
- Dependence on brick-and-mortar stores.
What Could Drive CATO Stock Higher?
Potential expansion of e-commerce platform to drive online sales growth.
- Strategic store openings in underserved markets to increase retail footprint.
- Enhancement of private label brands to improve margins and differentiate from competitors.
- Expansion into the plus-size market to cater to a wider range of customers.
- Leveraging credit card services to drive customer loyalty and increase sales.
What Are the Key Risks for CATO?
Negative return on equity (-0.1%) — the business is not currently generating profit on shareholder capital.
- Intense competition from other retailers affecting market share and profitability.
- Changing consumer preferences and fashion trends impacting sales and brand relevance.
- Economic downturns affecting consumer spending and retail sales.
- Supply chain disruptions impacting inventory and costs.
- Negative profit margin indicating challenges in achieving profitability.
What Are the Growth Opportunities for CATO?
- Expansion of E-commerce Platform: The Cato Corporation can expand its e-commerce platform to reach a broader customer base and increase online sales. By investing in its online presence, Cato can capitalize on this trend and drive revenue growth. Timeline: Ongoing.
- Strategic Store Openings: The company can strategically open new stores in underserved markets to expand its retail footprint. By identifying areas with strong demand for value-oriented fashion apparel, Cato can increase its market share and drive sales growth. Market analysis and demographic studies can help identify optimal locations. Timeline: Ongoing.
- Enhancement of Private Label Brands: Developing and promoting its private label brands can improve margins and differentiate Cato from its competitors. Private label brands often offer higher margins compared to national brands. By focusing on quality and value, Cato can build brand loyalty and drive sales. Timeline: Ongoing.
- Expansion into Plus-Size Market: The Cato Corporation can expand its offerings in the plus-size market to cater to a wider range of customers. The plus-size apparel market is a growing segment with significant potential. By offering fashionable and affordable options for plus-size customers, Cato can increase its market share and drive revenue growth. Timeline: Ongoing.
- Leveraging Credit Card Services: The company can leverage its credit card services to drive customer loyalty and increase sales. By offering attractive rewards and incentives, Cato can encourage customers to use its credit cards for purchases. This can lead to increased sales and customer retention. Timeline: Ongoing.
What Are CATO's Competitive Advantages?
- Established Brand: The Cato brand has been in existence since 1946, providing a level of recognition and trust among its customer base.
- Retail Network: The company's network of 1,311 stores provides a physical presence and convenience for customers.
- Credit Services: Offering credit card services and layaway plans enhances customer loyalty and purchasing power.
What Does CATO Do?
The Cato Corporation was founded in 1946 and has evolved into a specialty retailer focusing on fashion apparel and accessories. The company primarily operates in the southeastern United States, offering a range of products through its various store formats, including Cato, Cato Fashions, Cato Plus, It's Fashion, It's Fashion Metro, and Versona, as well as its e-commerce websites. These platforms provide dressy, career, and casual sportswear, dresses, coats, shoes, lingerie, costume jewelry, handbags, and lines for men, kids, and infants. As of January 29, 2022, Cato operated 1,311 stores across 32 states. In addition to retail operations, The Cato Corporation offers credit card services and layaway plans to its customers, enhancing purchasing flexibility. Headquartered in Charlotte, North Carolina, the company has established a significant presence in the value-oriented apparel market, catering to a diverse customer base seeking affordable and fashionable options.
What Products and Services Does CATO Offer?
- Operates specialty retail stores under the Cato, Cato Fashions, Cato Plus, It's Fashion, It's Fashion Metro, and Versona names.
- Offers a range of fashion apparel and accessories, including dressy, career, and casual sportswear.
- Provides dresses, coats, shoes, lingerie, costume jewelry, and handbags.
- Sells men's wear, and lines for kids and infants.
- Operates e-commerce websites for online shopping.
- Provides credit card services to customers.
- Offers layaway plans for customers who agree to make periodic payments.
How Does CATO Make Money?
- Retail Sales: Generates revenue through the sale of apparel and accessories in its stores and online.
- Credit Services: Earns income from interest and fees associated with its credit card services.
- Layaway Plans: Collects payments from customers using layaway plans.
What Industry Does CATO Operate In?
The Cato Corporation operates in the competitive apparel retail industry, which is characterized by changing consumer preferences, seasonality, and intense competition from both brick-and-mortar stores and e-commerce platforms. The industry is influenced by fashion trends, economic conditions, and consumer spending habits. Cato competes with other specialty retailers, department stores, and online retailers. The company's focus on value-oriented fashion apparel positions it within a specific segment of the market. The apparel retail industry is expected to experience moderate growth, driven by increasing consumer spending and the expansion of e-commerce.
Who Are CATO's Key Customers?
- Value-conscious consumers seeking affordable fashion apparel and accessories.
- Customers in the southeastern United States.
- Individuals seeking dressy, career, and casual sportswear.
- Customers utilizing credit card services and layaway plans.
Key Financial Metrics
Return on equity for The Cato Corporation stands at -0.1%, a gauge of how efficiently it converts shareholder capital into profit. Return on assets is -0.1%, showing how much profit it generates from its asset base. Its free cash flow yield is -1.9%, a gauge of the cash the business throws off relative to its market value. A current ratio of 1.29 indicates the company holds enough short-term assets to cover its near-term obligations. Its earnings yield is -0.4%, the inverse of the P/E and a quick read on earnings relative to price.
The Cato Corporation (CATO) Valuation Context
Valued at $68.8M, CATO is classified as a micro-cap stock. Relative to its peer group, CATO's quantitative score of 40/100 is below the peer average of 55/100.
Company Profile
The Cato Corporation operates in the Apparel - Retail industry within the Consumer Cyclical sector. It is headquartered in Charlotte, US. The company is led by CEO John Derham Cato. CATO has traded publicly since 1987.
Financial Health
The Cato Corporation's Piotroski F-Score is 5/9, a 9-point checklist of profitability, leverage and efficiency — a middling fundamental profile. Its Altman Z-Score of 1.87 places it in the grey zone, a middle ground that warrants monitoring.
Forward Outlook
Wall Street analysts project The Cato Corporation revenue of about $947.4M for fiscal 2027, with EPS near $1.68.
CATO Financials
Fundamental Snapshot
Based on FMP financials and quantitative analysis · FY 2025
Bull Case vs Bear Case
Bull Case
- Established brand with a long history.
- Extensive retail network in the southeastern United States.
- Offers credit card services and layaway plans.
- Focus on value-oriented fashion apparel.
Bear Case
- Negative profit margin.
- Limited geographic diversification.
- Small market capitalization.
- Dependence on brick-and-mortar stores.
AI-generated arguments based on insider flow, news sentiment and technicals — not financial advice · August 2026
CATO Latest News
No recent news available for CATO.
CATO Analyst Consensus
Consensus Rating
Aggregated Buy/Hold/Sell recommendations from Benzinga, Yahoo Finance, and Finnhub for CATO.
Price Targets
Wall Street price target analysis for CATO.
CATO MoonshotScore
What does this score mean?
The MoonshotScore rates CATO 0-100 on quantitative fundamentals — growth, financial health, valuation, momentum, and risk.
Leadership: John Derham Cato
Chief Executive Officer
John Derham Cato serves as the Chief Executive Officer of The Cato Corporation. His leadership is pivotal in guiding the company's strategic direction and operational efficiency. Information about his specific educational background and detailed career history prior to his role at The Cato Corporation is not available in the provided data. However, as CEO, he is responsible for overseeing the company's retail operations, financial performance, and overall growth strategy.
Track Record: Under John Derham Cato's leadership, The Cato Corporation has navigated the challenges of the competitive apparel retail market. His tenure has focused on maintaining the company's presence in the value-oriented segment and adapting to changing consumer preferences. Specific achievements and strategic decisions during his leadership are not detailed in the provided data, but his role is crucial in steering the company's performance and strategic initiatives.
What Investors Ask About The Cato Corporation (CATO) — Consumer Cyclical
What does the AI Score mean for CATO?
CATO holds an AI Score of 40/100 (Grade: C). This is an educational research signal, not a buy or sell recommendation. The Cato Corporation is a specialty retailer of fashion apparel and accessories, primarily operating in the southeastern United States. It offers a range of apparel and accessories through its …
What does The Cato Corporation do?
The Cato Corporation operates as a specialty retailer of fashion apparel and accessories, primarily in the southeastern United States. Through its various store formats like Cato, It's Fashion, and Versona, along with its e-commerce platforms, the company offers a range of products including dressy, career, and casual sportswear, dresses, coats, shoes, and accessories for women, men, and children.
What do analysts say about CATO stock?
Analyst sentiment on The Cato Corporation (CATO) is mixed, reflecting the company's challenges and opportunities. Key valuation metrics suggest caution due to the company's negative profit margin. Growth considerations include the potential for e-commerce expansion and strategic store openings. However, analysts also note the risks associated with intense competition and changing consumer preferences.
What are the main risks for CATO?
The Cato Corporation faces several key risks, including intense competition from other retailers, which can pressure market share and profitability. Changing consumer preferences and fashion trends pose a risk to sales and brand relevance. Economic downturns can negatively impact consumer spending and retail sales. Supply chain disruptions can affect inventory and costs.
What are the key factors to evaluate for CATO?
The Cato Corporation (CATO) holds an AI score of 40/100 (low). The Cato Corporation presents a mixed investment thesis. Not financial advice.
How frequently does CATO data refresh on this page?
CATO's price was last updated on Aug 20, 2026 and refreshes on page view during U.S. market hours — it is not a real-time exchange feed. Fundamentals update after quarterly filings; the MoonshotScore recalculates nightly; news aggregates continuously.
What has driven CATO's recent stock price performance?
The Cato Corporation (CATO) moves on earnings results, analyst revisions, sector rotation, and market sentiment. Notable catalyst: Established brand with a long history. See the News tab for the latest drivers. Past performance does not predict future results.
Should investors consider CATO overvalued or undervalued right now?
The Cato Corporation (CATO) has no trailing P/E available here, so lean on price-to-sales and cash flow in the Financials tab. Compare P/E, P/S, and EV/EBITDA against sector peers for a full view.
How do I research CATO before investing?
Before investing in The Cato Corporation (CATO), research these four areas: (1) the company's revenue model and competitive position (see Company Overview), (2) financial health through revenue growth, margins, and cash flow (see MoonshotScore), (3) analyst consensus ratings and price targets (see Analyst tab), and (4) specific risk factors that could impact the stock (see Risk Factors section).
Disclaimer: This content is for informational purposes only and does not constitute investment advice. Always do your own research and consult a financial advisor.
Official Resources
Data provided for informational purposes only.
- Information is based on the provided source data as of 2026-05-10.
- Financial data is limited to the provided metrics.
- Analyst opinions and future projections are not available in the source data.