Is Next (LON:NXT) expensive at 6,156p?

Clothes retailer Next (LON:NXT) has long been praised for its ability to avoid the wider malaise affecting high street retailers. The group kept a steady ship in its results for the year to 26 January 2019, with revenues up 3% to £4.17bn and net income down 1% to £590.4m.

Right now the Next share price is on the expensive side from a factor perspective, based on its Value Rank of 41. Let's see why this is.

A closer look at Next's Value Rank

We can see by using Next’s StockReport that the group has a:

• Rolling price to book value of 14.8,
• Trailing twelve month price to earnings ratio of 12.4
• Trailing twelve month price to free cashflow of 15.6
• Rolling dividend yield of 2.73%
• Trailing twelve-month price to sales ratio of 1.96

This combination of financial traits suggests that Next stock is toward the more expensive end of the market. Being expensive is not the end of the world, of course - but it does help to have favourable exposures to other factors to justify the share price premium.

What does this mean for potential investors?

Some of the best quality stocks in the market have defensible models that can deliver high levels of shareholder returns over the long term. But there are no guarantees and it's important to do your own research. Indeed, we've identified some areas of concern with Next that you can find out about here.