Inter Parfums trades at $101.89 per share and has stayed right on track with the overall market, losing 17.2% over the last six months while the S&P 500 is down 14.2%. This was partly due to its softer quarterly results and might have investors contemplating their next move.

Following the pullback, is this a buying opportunity for IPAR? Find out in our full research report, it’s free.

Why Is IPAR a Good Business?

With licenses to produce colognes and perfumes under brands such as Kate Spade, Van Cleef & Arpels, and Abercrombie & Fitch, Inter Parfums (NASDAQ: IPAR) manufactures and distributes fragrances worldwide.

1. Skyrocketing Revenue Shows Strong Momentum

A company’s long-term sales performance can indicate its overall quality. Any business can have short-term success, but a top-tier one grows for years. Over the last three years, Inter Parfums grew its sales at an impressive 18.2% compounded annual growth rate. Its growth beat the average consumer staples company and shows its offerings resonate with customers.

2. Elite Gross Margin Powers Best-In-Class Business Model

At StockStory, we prefer high gross margin businesses because they indicate pricing power or differentiated products, giving the company a chance to generate higher operating profits.

Inter Parfums has best-in-class unit economics for a consumer staples company, enabling it to invest in areas such as marketing and talent. As you can see below, it averaged an elite 58.7% gross margin over the last two years. That means for every $100 in revenue, only $41.31 went towards paying for raw materials, production of goods, transportation, and distribution.

3. Increasing Free Cash Flow Margin Juices Financials

Free cash flow isn't a prominently featured metric in company financials and earnings releases, but we think it's telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.

As you can see below, Inter Parfums’s margin expanded by 5.1 percentage points over the last year. This is encouraging, and we can see it became a less capital-intensive business because its free cash flow profitability rose while its operating profitability was flat. Inter Parfums’s free cash flow margin for the trailing 12 months was 12.6%.

Final Judgment

These are just a few reasons why Inter Parfums ranks highly on our list. After the recent drawdown, the stock trades at 19.4× forward price-to-earnings (or $101.89 per share). Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.

Stocks We Like Even More Than Inter Parfums

The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.

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