Steven Madden (Steven Madden) Intrinsic Value: DCF (FCF Based) : $34.73 (As of Apr. 28, 2024)

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What is Steven Madden Intrinsic Value: DCF (FCF Based)?

As of today (2024-04-28), Steven Madden's intrinsic value calculated from the Discounted Cash Flow model is $34.73.

Note: Discounted Cash Flow model is only suitable for predictable companies (Business Predictability Rank higher than 1-Star). If the company's predictability rank is 1-Star or Not Rated, result may not be accurate due to the low predictability of business and the data will not be stored into our database.

Steven Madden's Predictability Rank is 1.5-Stars.

Margin of Safety (FCF Based) using Discounted Cash Flow model for Steven Madden is -16.56%.

The industry rank for Steven Madden's Intrinsic Value: DCF (FCF Based) or its related term are showing as below:

SHOO's Price-to-DCF (FCF Based) is ranked worse than
60.76% of 79 companies
in the Manufacturing - Apparel & Accessories industry
Industry Median: 0.72 vs SHOO: 1.17

Steven Madden Intrinsic Value: DCF (FCF Based) Historical Data

The historical data trend for Steven Madden's Intrinsic Value: DCF (FCF Based) can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Steven Madden Intrinsic Value: DCF (FCF Based) Chart

Steven Madden Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Intrinsic Value: DCF (FCF Based)

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63.41

37.62

Steven Madden Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
Intrinsic Value: DCF (FCF Based)	Get a 7-Day Free Trial															-	-	-	-	37.62

Competitive Comparison of Steven Madden's Intrinsic Value: DCF (FCF Based)

For the Footwear & Accessories subindustry, Steven Madden's Price-to-DCF (FCF Based), along with its competitors' market caps and Price-to-DCF (FCF Based) data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Steven Madden's Price-to-DCF (FCF Based) Distribution in the Manufacturing - Apparel & Accessories Industry

For the Manufacturing - Apparel & Accessories industry and Consumer Cyclical sector, Steven Madden's Price-to-DCF (FCF Based) distribution charts can be found below:

* The bar in red indicates where Steven Madden's Price-to-DCF (FCF Based) falls into.

Steven Madden Intrinsic Value: DCF (FCF Based) Calculation

This is the intrinsic value calculated from the Discounted Cash Flow model with default parameters. In a discounted cash flow model, the future cash flow is estimated based on a cash flow growth rate and a discount rate. The cash flow of the future is discounted to its current value at the discount rate. All of the discounted future cash flow is added together to get the current intrinsic value of the company.

Usually a two-stage model is used when calculating a stock's intrinsic value using a discounted cash flow model. The first stage is called the growth stage; the second is called the terminal stage. In the growth stage the company grows at a faster rate. Because it cannot grow at that rate forever, a lower rate is used for the terminal stage.

GuruFocus DCF calculator is a two-stage model. The default values are defined as:

1. Discount Rate: d = 11%
A reasonable discount rate assumption should be at least the long term average return of the stock market, which can be estimated from risk free rate plus risk premium of stock market. GuruFocus uses 10-Year Treasury Constant Maturity Rate as the risk-free rate and rounded up to the nearest integer. It is updated daily. The current risk-free rate is 4.66%. Please go to Economic Indicators page for more information. Please note that we use the 10-Year Treasury Constant Maturity Rate of the country/region where the company is headquartered. If the data for that country/region is not available, then we will use the 10-Year Treasury Constant Maturity Rate of the United States as default. Then we added a risk premium of 6% to get the estimated discount rate. Some investors use their expected rate of return, which is also reasonable. A typical discount rate can be anywhere between 6% - 20%.

2. Growth Rate in the growth stage: g1 = 5.90%
The Growth Rate in the growth stage is initially set as the default 10-Year FCF Growth Rate (Per Share). In cases where the 10-year growth rate is unavailable, it defaults to using the 5-Year FCF Growth Rate (Per Share). If both the 10-year and 5-year growth rates are unavailable, the system defaults to the 3-Year FCF Growth Rate (Per Share).
However, it's important to note that there is a growth rate range. If the calculated growth rate exceeds 20%, it will be capped at 20%. Conversely, if the calculated growth rate falls below 5%, it will be adjusted to 5% to maintain a reasonable range.
=> Steven Madden's average Free Cash Flow Growth Rate in the past 10 years was 5.90%, which is between 5% and 20%. => GuruFocus defaults => Growth Rate: 5.90%

3. Years of Growth Stage: y1 = 10

4. Terminal Growth Rate: g2 = 4%

5. Years of Terminal Growth: y2 = 10

6. Free Cash Flow per Share: fcf = $2.839.
However, GuruFocus DCF calculator is actually a Discounted Earnings calculator, the EPS without NRI is used as the default. The reason we are doing this is we found that historically stock prices are more correlated with earnings than free cash flow.

All of the default settings can be changed and the results are calculated automatically.

Steven Madden's Intrinsic Value: DCF (FCF Based) for today is calculated as

Intrinsic Value: DCF (FCF Based)	=	Free Cash Flow per Share	*	{[(1+g1)/(1+d)	+	(1+g1)^2/(1+d)^2	+	...	+	(1+g1)^10/(1+d)^10]
	+	(1+g1)^10/(1+d)^10	*	[(1+g2)/(1+d)	+	(1+g2)^2/(1+d)^2	+	...	+	(1+g2)^10/(1+d)^10]}

set x = (1+g1)/(1+d) = (1+0.059)/(1+0.11) = 0.95405405405405
and y = (1+g2)/(1+d) = (1+0.04)/(1+0.11) = 0.93693693693694

Intrinsic Value: DCF (FCF Based)

Free Cash Flow per Share

{[x

x^2

...

x^10]

x^10

y^2

...

y^10]}

Free Cash Flow per Share

(1-x^10)

(1-x)

x^10

(1-y^10)

(1-y)]

2.839

12.2346

34.73

Margin of Safety (FCF Based)	=	(Intrinsic Value: DCF (FCF Based)	-	Current Price)	/	Intrinsic Value: DCF (FCF Based)
	=	(34.73	-	40.48)	/	34.73
	=	-16.56 %

Steven Madden (NAS:SHOO) Intrinsic Value: DCF (FCF Based) Explanation

Unlike valuation methods such as Net Current Asset Value, Tangible Book per Share, Graham Number, Median PS Value etc, discounted Cash Flow model evaluates the companies based on their future earnings power instead of their assets.

Be Aware

What you need to know about the DCF model:

1. The DCF model evaluates a company based on its future earnings power
2. Growth is taken into account; therefore a faster growth company is worth more if everything else is the same.
3. Since we are projecting future growth, it is assumed that the company will grow at the same rate as it did during the past 10 years. Therefore this model works better for the companies that have relatively consistent performance.
4. The DCF model works poorly for inconsistent performers such as cyclicals.
5. What discount rate should you use? Your expected return from the investment is a good discount rate assumption.
6. A larger margin of safety should be required for companies with less predictable businesses.

You can screen for stocks that trade below their Intrinsic Value: DCF (FCF Based) and Intrinsic Value: DCF (Earnings Based) with the GuruFocus All-in-One Screener. Companies with a high Predictability Rank that trade at a discount to their Intrinsic Value: DCF (FCF Based) and Intrinsic Value: DCF (Earnings Based) can be found in the screen of Undervalued Predictable Companies.

Steven Madden Intrinsic Value: DCF (FCF Based) Related Terms

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Steven Madden (Steven Madden) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Manufacturing - Apparel & Accessories » Steven Madden Ltd (NAS:SHOO) » Definitions » Intrinsic Value: DCF (FCF Based)

Comparable Companies

Traded in Other Exchanges

N/A

Address

52-16 Barnett Avenue, Long Island City, NY, USA, 11104

Website

https://www.stevemadden.com

Steven Madden Ltd designs and sells brand-name and private-label footwear and accessories. Its products are geared toward fashion-conscious adults and children. The company sells its products through department stores and other retailers as well as its own stores and websites. Nearly all of the company's revenue comes from three of its segments. The wholesale footwear segment accounts for the majority of revenue.

Executives

Karla Frieders	officer: Chief Merchandising Officer	C/O STEVEN MADDEN, LTD., 52-16 BARNETT AVENUE, LONG ISLAND CITY NY 11104
Peter Migliorini	director	C/O STEVEN MADDEN, LTD., 52-16 BARNETT AVENUE, LONG ISLAND CITY NY 11104
Robert Garrett Smith	director	C/O STEVEN MADDEN, LTD., 52-16 BARNETT AVENUE, LONG ISLAND CITY NY 11104
Edward R. Rosenfeld	director	C/O STEVEN MADDEN, LTD., 52-16 BARNETT AVENUE, LONG ISLAND CITY NY 11104
Peter Allan Davis	director	C/O STEVEN MADDEN LTD, 52-16 BARNETT AVENUE, LONG ISLAND CITY NY 11104
Arian Simone Reed	director	C/O STEVEN MADDEN LTD, 52-16 BARNETT AVENUE, LONG ISLAND CITY NY 11104
Amelia Varela	officer: EVP of Wholesale Sales	C/O STEVEN MADDEN LTD, 52-16 BARNETT AVENUE, LONG ISLAND CITY NY 11104
Awadhesh K Sinha	officer: Chief Operating Officer	C/O STEVEN MADDEN, LTD., 52-16 BARNETT AVENUE, LONG ISLAND CITY NY 11104
Zine Mazouzi	officer: Chief Financial Officer	C/O STEVEN MADDEN, LTD., 52-16 BARNETT AVENUE, LONG ISLAND CITY NY 11104
Maria Teresa Kumar	director	C/O STEVEN MADDEN, LTD., 52-16 BARNETT AVENUE, LONG ISLAND CITY NY 11104
Thomas H Schwartz	director	C/O STEVEN MADDEN, LTD., 52-16 BARNETT AVENUE, LONG ISLAND CITY NY 11104
Lisa Keith	officer: VP and General Counsel	52-16 BARNETT AVENUE, LONG ISLAND CITY NY 11104
Arvind Dharia	director, officer: Chief Financial Officer	C/O STEVEN MADDEN LTD, 52-16 BARNETT AVENUE, LONG ISLAND CITY NY 11104
Al Ferrara	director	433 LAWNDALE DRIVE, SOUTH SALT LAKE CITY UT 84115
Rose Peabody Lynch	director	C/O STEVEN MADDEN, LTD., 52-16 BARNETT AVENUE, LONG ISLAND CITY NY 11104