Does YETI’s New Product Line Signal Opportunity Following 11% Drop in 2025?

• Ever wondered if YETI Holdings is hiding some untapped value, or if its current price tag tells the whole story? Let's dig beneath the surface to find out what might be next.
• The stock's journey has been a wild ride lately, with the share price down 3.4% this week and off 11.0% year-to-date. Its 3-year return still sits in positive territory.
• Recent headlines have spotlighted YETI's new product launches, including the company's expanded line of drinkware and collaborations with major outdoor brands. These moves are fueling the debate around YETI's future growth stories and may explain some of the ups and downs in its share price.
• According to our quick check, YETI Holdings scores a 4 out of 6 on our valuation checklist. This indicates it is undervalued in a majority of the factors we examine. We will break down these valuation approaches in detail next, and there is an even more insightful way of looking at value that we will get to at the end of the article.

YETI Holdings delivered -7.6% returns over the last year. See how this stacks up to the rest of the Leisure industry.

Approach 1: YETI Holdings Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow (DCF) model estimates a company's value by projecting its future cash flows and discounting them back to today's dollars. This approach helps investors determine what a stock may actually be worth based on its potential for generating cash in the coming years.

For YETI Holdings, analysts estimate the company will produce free cash flows of $210.93 million over the last twelve months, with projections indicating this could increase to nearly $286.67 million by the end of 2029. While analysts provide estimates for the next several years, further cash flow projections are extrapolated to complete the 10-year outlook. All values are in USD.

When all these projected cash flows are discounted back to present value, the DCF model calculates an intrinsic value of $90.05 per share. With the current share price reflecting a 62.9% discount compared to this intrinsic value, the numbers suggest YETI Holdings is significantly undervalued according to the DCF approach.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests YETI Holdings is undervalued by 62.9%. Track this in your watchlist or portfolio, or discover 840 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 YETI Holdings.

Approach 2: YETI Holdings Price vs Earnings

The Price-to-Earnings (PE) ratio is one of the most widely used valuation metrics for profitable companies like YETI Holdings. It offers a straightforward way to compare the company’s share price relative to its net earnings, making it particularly useful for businesses that consistently generate profits.

Generally, a higher PE ratio is justified when investors expect stronger future growth or perceive the company as carrying less risk. On the other hand, if growth prospects are modest or risks are elevated, a lower PE is appropriate. For YETI Holdings, the current PE ratio sits at 15.3x, which is noticeably below the Leisure industry average of 20.9x and well under the average PE among its listed peers of 48.1x.

This is where Simply Wall St’s proprietary “Fair Ratio” comes into play. The Fair Ratio for YETI Holdings is calculated at 13.4x, incorporating company-specific factors like earnings growth, profit margins, market cap, risks, and the wider industry context. This approach offers a more balanced and tailored benchmark than simply comparing to industry or peers. In essence, it reflects what would be considered a reasonable valuation for this specific business right now.

Comparing YETI Holding's current PE ratio of 15.3x to its Fair Ratio of 13.4x suggests that the stock is trading at a modest premium to its fair value. However, the difference is not dramatic and may reflect market expectations for future performance or a quality premium.

Result: OVERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1404 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your YETI Holdings Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is your personal investment story—a way to put your own expectations and beliefs about YETI Holdings into a simple forecast: what you think the company can achieve in terms of future revenue, profits, and margins, and how those assumptions translate to fair value.

Narratives link a company’s real-world story to a financial forecast and a fair value, giving you a clear path from your perspective on the business to a practical investment decision. With Narratives, you don't need to build a financial model from scratch. Instead, you can easily create, edit, and review your view on Simply Wall St’s Community page, right alongside millions of other investors.

They also help you decide when to buy or sell by showing gaps between your Fair Value and today’s price, and they update automatically whenever new data or news becomes available. For YETI Holdings, for example, some investors are highly optimistic, setting a fair value as high as $53.00, while others remain cautious, setting theirs as low as $32.00. Simply select or create the Narrative that matches your view, and you will always have a dynamic, evidence-based way to act on your convictions.

Do you think there's more to the story for YETI Holdings? 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com