A Look at Steven Madden’s (SHOO) Valuation Following Analyst Upgrade and Strong Consumer Spending Data

If you’re watching Steven Madden (SHOO) following this week’s sharp move, you’re not alone. Shares jumped after August’s consumer spending data came in above expectations, supporting the view that shoppers are still opening their wallets. Investors also got a lift from news that an analyst upgrade cited improved profitability and earnings power, hinting that the company may finally be putting earlier supply chain headaches behind it.

This upswing builds on a period of positive momentum for Steven Madden. While the stock delivered solid short-term gains, up 16% in the past month and 41% over the past 3 months, it is still digging out from longer-term declines, with a 29% drop over the past year. That turnaround in sentiment, driven by both strong economic data and renewed optimism about earnings, is catching the eye of value-focused investors looking for signals of sustainable growth.

After this bounce, is there still room for upside, or has the market already adjusted for a bright outlook? Are shares trading at a bargain, or could all the good news be baked in?

Most Popular Narrative: 12.6% Overvalued

According to the most widely followed narrative, Steven Madden is currently priced above its calculated fair value based on projections for earnings, margins, and global expansion potential.

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.

The story here is bigger than just a rebound. Behind Steven Madden's lofty valuation is an ambitious vision that goes beyond just footwear margins or market trends. Consider international velocity, margin acceleration, and a company focused on outpacing its own track record. Want to know the explosive growth targets and eye-catching profit projections driving this fair value? Those headline numbers could surprise you.

Result: Fair Value of $30 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent tariff headwinds or unexpected inventory challenges could quickly shift sentiment and put pressure on Steven Madden's margin recovery story.

Find out about the key risks to this Steven Madden narrative.

Another View: What Does the DCF Model Say?

While consensus points to Steven Madden trading above fair value on earnings and growth prospects, our DCF model offers a different perspective. This approach suggests the market may be overlooking key drivers. Could the truth lie somewhere in between?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Steven Madden for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Steven Madden Narrative

If you see things differently or want to dig through the numbers on your own, it only takes a few minutes to shape your own view, and Do it your way.

A great starting point for your Steven Madden 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.

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