Last Update 18 Dec 25

Fair value Increased 4.00%

SHOO: Margin Recovery And Fast Inventory Turns Will Support Future Earnings Power

Analysts have nudged their fair value estimate for Steven Madden higher to $45.50 from $43.75, citing a series of recent target hikes into the low to mid $40s and growing conviction that margin recovery and underappreciated long term earnings power justify a modestly richer valuation multiple.

Analyst Commentary

Bullish analysts highlight that the recent string of upgrades and target hikes into the low to mid $40s reflects growing confidence that Steven Madden is in the early stages of a multi year earnings recovery, with current valuation multiples still not fully embedding that trajectory.

Bullish Takeaways

Bullish analysts point to increasing price targets in the $40 to mid $40s range as evidence that consensus is gradually converging toward a higher normalized earnings power and a more premium multiple.
Several upgrades cite the company’s fast inventory turns and improving tariff backdrop, which are expected to support a rebound in EBIT margins from the current mid single digit levels toward low double digits over time.
Contributors to structural margin expansion, including the scaling of higher margin brands such as Kurt Geiger toward mid teens margin levels, are seen as underappreciated drivers of earnings growth beyond near term recovery.
With shares still down year to date and trading at roughly mid teens multiples of outer year estimates, bullish analysts argue that the market is not fully pricing in the potential for $4 plus in earnings power and view the risk reward as skewed to the upside.

Bearish Takeaways

More cautious analysts flag that despite upgrades, the stock has already moved materially off its lows, which limits the margin of safety if execution on margin recovery or brand growth underwhelms expectations.
There is concern that the path back to 11 percent to 12 percent EBIT margins could prove slower than modeled if consumer demand softens or promotional intensity rises, pressuring both pricing and mix.
Some bearish analysts warn that tariff and supply chain benefits could prove transitory, leaving Steven Madden more exposed if costs re accelerate or if inventory discipline weakens from current fast turning levels.
Valuation skeptics note that while a mid teens multiple on 2026 earnings may look inexpensive if $4 plus in earnings materializes, any shortfall in growth or delays in scaling higher margin businesses could quickly compress the implied upside.

What's in the News

Updated buyback disclosure shows no shares repurchased in the third quarter of 2025, while confirming that the long running authorization from 2005 has cumulatively retired over 37 million shares, or just above 42 percent of shares outstanding (company filing).
Management issued new fourth quarter 2025 guidance calling for a 27 percent to 30 percent year over year revenue increase, indicating a sharp acceleration in top line momentum compared with 2024 (company guidance).
The company expects GAAP diluted EPS of $0.30 to $0.35 in the fourth quarter of 2025, helping frame investor expectations for near term profitability as margin recovery efforts progress (company guidance).

Valuation Changes

The Fair Value Estimate has risen slightly to $45.50 from $43.75, reflecting modestly higher long-term earnings expectations.
The Discount Rate has fallen marginally to 9.07 percent from 9.08 percent, implying a slightly lower perceived risk profile in the valuation model.
The Revenue Growth assumption has increased fractionally to about 11.26 percent from 11.25 percent, indicating a very small upgrade to top-line growth expectations.
The Net Profit Margin assumption has edged down slightly to about 11.15 percent from 11.15 percent, suggesting essentially unchanged long-run profitability expectations.
The future P/E multiple has risen modestly to about 11.9x from 11.4x, indicating a somewhat richer valuation being applied to projected earnings.

Strong digital and international growth, strategic focus on younger consumers, and e-commerce expansion are driving higher margins and diversified revenue streams.
Supply chain diversification, vertical integration, and the Kurt Geiger acquisition enhance cost efficiency, margin stability, and global brand scaling potential.
Ongoing tariff uncertainty, sourcing concentration, and inventory risks threaten margin stability, earnings growth, and a sustainable recovery in the face of volatile consumer demand.

Catalysts

About Steven Madden

Designs, sources, and markets fashion-forward branded and private label footwear, accessories, and apparel in the United States and internationally.What are the underlying business or industry changes driving this perspective?

Strong double-digit digital growth-especially in the U.S. for both Steve Madden and newly acquired Kurt Geiger-alongside increased marketing focus on Gen Z/millennial consumers and expanded e-commerce investments, should enable faster revenue acceleration and higher margin mix as direct-to-consumer channels continue to outpace wholesale.
Expansion of international business, evidenced by high single-digit to double-digit constant currency growth across EMEA, APAC, and Americas outside the U.S., and plans to scale Kurt Geiger globally through the Steve Madden network, positions the company to benefit from a rising global middle class and geographically diversified revenue, supporting top-line growth.
Early consumer acceptance of selective price increases (~10% on average, higher for new fashion and Kurt Geiger), combined with a focus on trending categories like boots and dress shoes, signals potential for margin recovery and higher average selling prices as macro/tariff headwinds abate.
Vertical integration efforts and ongoing supply chain diversification away from China (expecting U.S. imports sourced from China to drop from 71% to 30% YoY) provide a pathway to improve gross margin stability and working capital management, supporting future earnings recovery once tariff disruptions stabilize.
Kurt Geiger integration creates meaningful synergies, with opportunities to scale the brand via Steve Madden's distribution in the U.S. and globally, leverage digital momentum, and unlock cost efficiencies-potentially accelerating revenue growth, portfolio diversification, and net margin expansion over the medium to long term.

Steven Madden Earnings and Revenue Growth

Steven Madden Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Steven Madden's revenue will grow by 10.5% annually over the next 3 years.
Analysts assume that profit margins will increase from 3.9% today to 8.5% in 3 years time.
Analysts expect earnings to reach $266.9 million (and earnings per share of $3.11) by about September 2028, up from $91.0 million today.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 10.1x on those 2028 earnings, down from 24.2x today. This future PE is lower than the current PE for the US Luxury industry at 19.8x.
Analysts expect the number of shares outstanding to grow by 0.64% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 9.0%, as per the Simply Wall St company report.

Steven Madden Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Prolonged and uncertain tariff regimes on imports, especially from China and other key sourcing countries like Brazil, create ongoing pressure on gross margins, increase landed costs, and disrupt both wholesale and DTC inventory flows, raising the risk of persistent margin compression and earnings volatility.
Heavy reliance on value-priced wholesale channels (mass and off-price), which experienced significant order cancellations (accounting for 95% of the wholesale revenue shortfall), exposes the company to wholesale customer caution and limited pricing power, constraining top-line revenue growth and margin recovery if consumer discretionary spending in these segments remains depressed.
Difficulty in swiftly diversifying sourcing away from China and adapting to shifting tariff landscapes in other countries (e.g., Brazil introducing new tariffs), increases operational complexity and raises the risk of continued supply chain disruptions, delayed deliveries, and increased cost of goods sold, all of which can dampen earnings and net margins.
Elevated inventory levels (up significantly due to recent acquisition and tariff impacts), along with pressure from fast-changing fashion cycles and uncertain consumer response to price increases, heighten the risk of inventory obsolescence, higher markdowns, and negative impact on net income and return on capital.
Growing operating expenses and lack of near-term guidance for margin recapture-compounded by integration risks with the Kurt Geiger acquisition and potentially lower near-term EBIT margins due to tariffs-could constrain sustainable earnings growth and challenge the achievement of double-digit operating margins in the foreseeable future.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $28.125 for Steven Madden based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $34.0, and the most bearish reporting a price target of just $24.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $3.1 billion, earnings will come to $266.9 million, and it would be trading on a PE ratio of 10.1x, assuming you use a discount rate of 9.0%.
Given the current share price of $30.28, the analyst price target of $28.12 is 7.7% lower. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Analysts Boost Steven Madden Price Targets on Margin Recovery and Strong Growth Outlook