One of last week's biggest losers was Skechers (NYSE:SKX), shedding 16% of its value after posting mixed second-quarter results and unappetizing guidance. The actual carnage was worse, as the stock had moved higher for three straight trading days ahead of Thursday afternoon's report, only to plunge 21% on Friday. This is the second quarter in a row in which Skechers stock suffered a decline of at least 20% the day after posting fresh financial results. The stock took a 27% hit last time out with its first-quarter report.  

A couple of analysts would go on to downgrade the stock ahead of Friday's open, and a third Wall Street pro is slashing his price target on the shares. Sensing opportunity in the chaos, Ronnie Moas at Standpoint Research is bucking the trend by upgrading the stock following the initial sell-off.

Skechers' flagship store in Manhattan Beach as the sun sets.

A Skechers store in Manhattan Beach, Calif. Image source: Skechers.

A quarter to forget

Net sales climbed 11% to hit $1.135 billion in the second quarter, Skechers' weakest top-line growth in more than a year. But that was actually smack dab in the middle of the $1.12 billion to $1.145 billion it was targeting back in April. Gains internationally were held back by slower growth at its domestic retail stores and a decline in its stateside wholesale business. 

The rally killers last week were disappointing bottom-line results -- net income declined 24%, well below its earlier forecast -- and problematic guidance. Skechers sees another period of negative earnings growth on a 9% to 12% uptick in net sales.

Wall Street was generally displeased with the performance. Tom Nikic at Wells Fargo downgraded the stock from outperform to market perform, slashing his price target from $40 to $24. With margins under pressure and profitability going the wrong way, he sees rough comparisons heading into this year's holiday quarter. Susquehanna also lowered its rating on Skechers. Jay Sole at UBS stuck to his buy recommendation for the stock, but he did reduce his price target from $41 to $37 given the unwelcome spike in corporate overhead that dragged down bottom-line results. 

Then we have Standpoint's Moas going against the herd with his upgrade in light of the stock's second consecutive quarterly earnings sell-off. He is lifting his rating from hold to buy, though his one-year price target of $32 doesn't leave a lot of room for upside. He sees the stock's plunge on Friday as a market overreaction, giving nimble traders and investors a chance to cash in on the calamity for a stock trading for a little more than 10 times next year's projected earnings. 

There's definitely value in Skechers stock following last week's slide, but investors may want to make sure that the footwear giant can turn things around on the bottom line before lacing up again. After back-to-back disastrous quarters, Skechers still needs to win back the market's trust.