Tapestry (TPR) shares have quietly gathered momentum over the past month, rising more than 10% as market sentiment warmed to consumer discretionary names. Some investors are taking notice and see an interesting setup for the stock.

Momentum has been building for Tapestry, with the stock’s 30-day share price return topping 10% and a one-year total shareholder return now at 1.6%. While the gains have been noticeable recently, this performance follows a longer period of gradual growth as the market reassesses consumer discretionary stocks and shifts its view on Tapestry’s earnings outlook.

If you’re exploring where investor enthusiasm might head next, consider expanding your search and discover fast growing stocks with high insider ownership

With shares up sharply in recent weeks, investors are now weighing whether Tapestry is trading below its true value or if the market is already factoring in all expected gains, which could leave little room for upside.

Most Popular Narrative: 2% Undervalued

With Tapestry’s fair value estimated at $118 according to the most widely followed narrative, investors see the recent close at $115.49 as offering a small, but real, margin of safety. The narrative’s perspective highlights why some market participants believe the current price still provides room for upside, even after recent gains.

“Ongoing investments in digital infrastructure, omnichannel capabilities, and data-driven customer engagement are expected to enable margin expansion and direct-to-consumer growth. These initiatives may enhance both revenue and net margins over the long term.”

Want to know the engine powering this valuation? The story centers on bold bets on tech, ambitious margin targets, and a profit surge few expect. What radical forecasts underpin the consensus? Click to unpack the daring drivers that shape this fair value outlook.

Result: Fair Value of $118 (UNDERVALUED)

However, significant risks remain, including further tariff pressures and heavy investment spending. Either of these factors could disrupt Tapestry’s projected growth path.

Another View: Market Multiples Paint a Very Different Picture

Stepping back from the fair value outlook, Tapestry's price-to-earnings ratio stands at a striking 130.5 times profits. This is sharply above both the US Luxury industry average of 21.3x and the peer average of 35.8x. This figure is also well beyond the fair ratio of 28.3x suggested by market historicals. Such a gap raises real questions about valuation risk. Does the market see unrealized upside, or is optimism running ahead of reality?

Build Your Own Tapestry Narrative

If you’d rather chart your own path and dive deeper into the numbers, you can shape your own view in just a few minutes. Do it your way

A great starting point for your Tapestry research is our analysis highlighting 2 key rewards and 3 important warning signs that could impact your investment decision.

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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.