BIRK Stock Study (10-19-25)

Posted by Mark on December 24, 2024 at 07:15 | Last modified: October 20, 2025 09:44

I recently did a stock study on Birkenstock Holding PLC (BIRK, $41.94).

M* writes:

     > Birkenstock Holding PLC is a company that manufactures and sells
     > footbed-based products, including sandals, closed-toe silhouettes,
     > and other products, such as skincare and accessories, for everyday
     > leisure, and work. It sells its products through two main channels:
     > business-to-business (B2B) which comprises sales made to established
     > third-party store networks, and direct-to-consumer (DTC) which
     > comprises sales made on globally owned online stores through the
     > Birkenstock.com domain and sales made in Birkenstock retail stores.

The medium-size company begins trading publicly in Oct 2023. For purposes of this analysis, I will use data since 2021 (excluding 2020 due to negative EPS). Given the limited amount of historical data available, I would consider no more than a speculative position in this stock.

Since 2021 (FY ends Sep 30), the company has grown sales and EPS at annualized rates of 19.3% and 2.8%, respectively. Lines are somewhat up, straight, and parallel except for big EPS dip in ’23.

Since 2021, PTPM leads peer and industry averages while ranging from 10.3% in ’23 to 20.2% in ’22 with a last-4-year mean of 15.6%. ROE in ’24 trails peers and the industry at 7.0%. Debt-to-Capital is comparable to peers and the industry while falling from 48.2% (’21) to 34.0% (’24) with a last-4-year mean of 43.6%.

Quick Ratio is 1.13 with Interest Coverage 7.5 per M* who assigns a “Narrow” [quantitative] Economic Moat and gives a B grade for Financial Health. Value Line (VL) rates the company B+ for Financial Strength.

With regard to sales growth:

• YF projects YOY 15.9% and 14.4% for ’25 and ’26, respectively (based on 16 analysts).
• Zacks projects YOY 27.7% and 13.4% per year for ’25 and ’26, respectively (4 analysts).
• VL projects 12.3% annualized growth from ’24-’29.
• CFRA gives ACE of 15.8% YOY and 15.1% per year for ’25 and ’24-’26, respectively (16).
• M* gives a 2-year ACE of 19.0% annualized growth.

My 12.0% forecast is below the range.

With regard to EPS growth:

• MarketWatch projects annualized growth of 30.1% and 27.1% for ’24-’26 and ’24-’27 (based on 19 analysts).
• Nasdaq.com gives ACE of 18.5% YOY and 21.1% per year for ’26 and ’25-’27 (7 / 7 / 4 analysts for ’25 / ’26 / ’27).
• Seeking Alpha projects 4-year annualized growth of 25.4%.
• Finviz gives 5-year ACE of 25.4% per year (4).
• LSEG gives LTG projection of 22.8%.
• YF projects YOY 34.3% and 22.8% for ’25 and ’26, respectively (20).
• Zacks projects YOY 40.3% and 18.5% per year for ’25 and ’26 (7) along with 5-year annualized growth of 22.8%.
• VL projects 19.6% annualized growth from ’24-’29.
• CFRA gives ACE of 68.6% YOY and 43.8% per year for ’25 and ’24-’26, respectively (20).

My 18.0% per year forecast is below the long-term-estimate range (mean of five: 23.2%). My initial value will be ’24 EPS of $1.11 rather than 2025 Q3 EPS of $1.80 (annualized).

My Forecast High P/E is 24.0. High P/E from ’24 is 58.6. I am centering forecasts below VL’s future average annual P/E of 20.

My Forecast Low P/E is 14.0. Low P/E from ’24 is 32.4. I am centering forecasts below VL’s future average annual P/E of 20.

My Low Stock Price Forecast (LSPF) is $29.00. Default ($15.50) based on initial value given above is unreasonably low at 63.0% (61.8%) less than previous close (52-week low), respectively. My arbitrary forecast is 30.9% (28.6%) less.

These inputs land BIRK in the HOLD zone with a U/D ratio of 1.5. Total Annualized Return (TAR) is 7.7%.

PAR (using Forecast Average—not High—P/E) 2.8% is less than the current risk-free rate (T-bills). If a healthy margin of safety (MOS) anchors this study, then I can proceed based on TAR instead (still less than I seek in a medium-size company).

To assess MOS, I compare my inputs with those of Member Sentiment (MS). Based on only seven studies done in the past 90 days (two outliers including mine excluded), averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, and Forecast Low P/E are 14.7%, 19.8%, 37.8, and 29.4. I am lower across the board. VL projects a future average annual P/E of 20.0, which is higher than MS (33.6) and [intentionally] higher than mine (19.0).

MS high / low EPS are $3.31 / $1.44 versus my $2.53/ $1.11 (per share). My high EPS is less due to a lower growth rate. VL is greater than both at $3.50.

MS LSPF of $40.30 implies a Forecast Low P/E of 28.0: less than the above-stated 29.4. MS LSPF is 4.8% less than the default $1.44/share * 29.4 = $42.34 resulting in more conservative zoning. MS LSPF is 39.0% greater than mine, however.

I believe MOS is robust in this study because my inputs are below respective analyst/historical ranges [and MS averages although low MS sample size only makes sense as anecdotal comparison] including significant multiple compression. Supporting the MOS is MS TAR (20.8%) being 13.1% per year greater than mine.

With regard to valuation, PEG is 0.8 and 1.1 per Zacks and my projected P/E, respectively: fairly valued. In contrast, M* suggests extremely undervalued at 0.3.

Per U/D, BIRK is a BUY under $36.90/share. BI TAR criterion is met at 60.7 / ((14.87 / 100) + 1) ^ 5 = $30.35 given forecast high price $60.70.

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