My estimate of the value here is about $55 based on ttm diluted earnings of $4.06 and an average of 10% growth over the next five years. That is a pretty basic DCF valuation. I'll try to put together a more sophisticated evaluation using FCFF to get a deeper look.
Does anyone else have an analysis to present? indian keeps talking about value but I haven't seen his analysis - which may be more gut feel than anything. What do you have indian??
My analysis is no gut feel as it more related to intrinsic value and future cash.
As I have stated repeatedly, this brand is not a fad, has never been a fad. This company never planned on relying on just one product or one gender or one segment of the population.
This brand has shown it can cater to women, children, and if one take a look at the UGGS website, one will see the growth of the men's line and how products are being gobbled up and LOVED just like the Womens products are.
The Cole Haan purchase by private equity provides a base and ABSOLUTE bottom of what UGGS(not DECKERS, but UGGS) is worth. So that is the equivalent of 19/share to us as Col Haan was bought out for 570M.
We have more than double the revenues and more profit than companies like Under Armour, Ann Taylor, Abercrombie and Fitch, and all these companies are valued significantly higher than us.
The company has PROVEN to be a mainstay(8 years and counting) as a brand and innovation is phenomenal. It started with a classic, moved on to so many variations, as well as slippers, and all have been accepted by the consumer and loved.
Even with a decrease in earnings, the BRAND itself is worth what we are trading just in direct comparison to Cole Haan Sale.
Stock is trading at 10 p/e DESPITE this company GROWING its mens line and proving that it is in fact an innovation company. I honestly believe this company is the next COACH but with footwear as an addition. Company is adding Robes, Handbags, etc to the line, all TOP Quality. Management despite some bad decisions(raising prices too high the last two years, but then reined in) has made some great as well.
The market is NOT PRICING IN any of this. Hence undervalued extremely. Especially to future cash. UGGS is a goldmine.
Sure its subjective but Deckers isn't a procter and gamble with numbers that will virtually remain. One needs to seriouly look at the lines and products they have and are coming out with and ask 1)are customers buying it and 2)why would they not keep buying great and top quality products put out going foward.
Bottom line though, despite popular belief that the market is quantitative, the market is subjective. If you don't think subjectively, you won't make money. You need to think ahead and see beyond before the other guys do and not just look at the current numbers. But imagine the current numbers and then some due to new products.
Go to youtube and type in UGGS collections. Thse girls buy 5 or more styles of the boot to go with their different outfits. These girls are insane but if it makes me rich I don;t care and it obviously makes them feel good.
That's all very subjective. You need to put some numbers in there! An analysis based on current values (as you wrote, "double the current revenues", etc.) is one thing but a proper analysis needs to be (a) PER SHARE and (b) based on revenue growth. When you buy a stock you are not buying current cash flow but future. How much would you pay for a company that has one year of massive earnings followed by nothing? Not much, right? All that you've written is just gut feel so far.