Does the Recent 6.3% Rebound Signal Opportunity for Steven Madden Stock in 2025?

• Ever wondered if Steven Madden's current share price offers real value, or if it's hiding a bargain in plain sight? This is the question that both experienced and first-time investors are asking right now.
• After a recent 6.3% rebound over 30 days, Steven Madden's stock has still slipped 11.4% year-to-date and is down 8.2% over the last year, so there's plenty of debate around whether the risks or opportunities are winning out.
• Market watchers are buzzing about shifting consumer trends and the evolving competitive landscape in footwear retail. Both factors appear to be driving sentiment, as the company adapts to changing preferences and channels. News of strategic partnerships and supply chain investments is also influencing investor outlook, potentially explaining the recent price volatility.
• Steven Madden's value score sits at 2 out of 6, which suggests it is only considered undervalued by a couple of our major criteria. In the next section, we will dig into how these valuation checks work, followed by a more holistic way to understand the company's true worth that you will not want to miss.

Steven Madden scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Steven Madden Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates a company's intrinsic value by forecasting its future cash flows and discounting them back to today's dollars. This approach helps investors assess what the business is truly worth, ignoring short-term market sentiment.

For Steven Madden, the two-stage Free Cash Flow to Equity model is used. This means it starts with detailed projections for the next several years, then applies a simpler growth estimate for the longer term. The company's current Free Cash Flow stands at $144.5 million, and analysts forecast strong growth, with Free Cash Flow expected to reach $302 million by 2027. Further into the next decade, projections suggest Free Cash Flow could surpass $698 million by 2035. While analysts provide estimates until 2027, projections beyond this are extrapolated using expected growth rates.

Based on these calculations, Steven Madden's estimated intrinsic value stands at $110.80 per share. Compared to its actual share price, this model suggests the stock is trading at roughly a 66.5% discount, implying it is significantly undervalued.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Steven Madden is undervalued by 66.5%. Track this in your watchlist or portfolio, or discover 906 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Steven Madden.

Approach 2: Steven Madden Price vs Earnings

For profitable companies like Steven Madden, the Price-to-Earnings (PE) ratio is a widely used metric to assess whether a stock is fairly valued. The PE ratio measures how much investors are willing to pay for a company's earnings. Higher expectations for growth or lower risk typically result in a higher "normal" or fair PE multiple.

Currently, Steven Madden trades at a PE ratio of 48x. This stands well above the luxury industry average of 19.2x and the peer average of 17.2x. At first glance, this premium might raise eyebrows, but raw multiples do not account for company-specific factors such as unique growth prospects, profit margins, or market position.

To address this, Simply Wall St calculates a "Fair Ratio" for Steven Madden, which in this case is 45.3x. This proprietary metric builds in expectations for the company’s future earnings growth, risk profile, margins, industry conditions, and its size in the market. Unlike straight comparisons to the industry or peers, the Fair Ratio provides a more tailored estimate of what would be a reasonable multiple for Steven Madden at this moment.

Given that Steven Madden's actual PE ratio of 48x is quite close to its Fair Ratio of 45.3x, the stock appears fairly valued according to this method.

Result: ABOUT RIGHT

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1421 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Steven Madden Narrative

Earlier, we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives. A Narrative is a simple, powerful tool that lets you tell your story about Steven Madden by combining your own perspective on its business drivers, future revenue, earnings, and margins with a financial forecast and a calculated fair value. Narratives are much more than numbers. They connect the company’s evolving story with what that means for its share price, putting the “why” behind the “what.”

Available to all investors within Simply Wall St’s Community page, Narratives make it easy and accessible to create, compare, and explore different perspectives. Millions of investors are already using them to upgrade their decisions. Narratives dynamically update as new news or earnings land, so you are always working with the latest information. By comparing your fair value against the current share price, you can quickly decide when a stock is a potential buy or sell for you personally.

For example, some investors are optimistic about Steven Madden’s ability to boost operating margins and have set a fair value as high as $35.75 per share, while others see persistent cost pressures and target a fair value as low as $24.00. Narratives help you decide which story you believe and what action to take.

Do you think there's more to the story for Steven Madden? Head over to our Community to see what others are saying!

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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